2021 (11) TMI 980 - HC - GST

Seeking release of monetary compensation/reward - Release of lorries and trucks - HELD THAT - The writ petition cannot be treated to be a frivolous litigation. The issue as to whether the appellant can be recognized as an informant or not under the relevant circulars issued by the Central Board of Excise Customs (C.B.E.C.), what is required to be first seen is whether there has been any illegal imports of the betel nuts from the neighbouring countries into the State of West Bengal. The court can take judicial notice of the fact that the Customs Department and the Central Excise Department very often initiate action based on special intelligence. The show cause notice also states that information was gathered by specific intelligence either by the DRI or the DGFT or other investigating agencies. Therefore, there is no requirement for the Customs and Excise to disclose the source of information based on which investigation was undertaken. Therefore, the court fails to understand as to why effective action was not taken by the Customs Department pursuant to the representations made by the appellant. The writ petition needs to be heard and decided on merits for which affidavits are required from the concerned respondent viz. Customs Authorities. That apart, the appellant is required to implead the SGST authority as well as the State Government as party respondent so that the matter can be examined from the angle as to whether the SGST authority would have jurisdiction or domain over the said goods and whether they would be entitled to levy tax and penalty. The writ petition is restored to the file and number of the learned Single Bench to be heard and decided on merits after affidavits are filed by the respondents - The appeal is, thus, allowed. The order passed in the writ petition is set aside.

Summary

Issues involved:
Appeal against dismissal of writ petition seeking mandamus for consideration of representation, release of compensation, and examination of release of lorries and trucks; Recognition of appellant as informant under circulars; Illegal imports of betel nuts; Violation of Customs Act and DGFT notification; Alleged loss of customs duties; Leakage of revenue; Connivance of officials; Failure of Customs Department to take action; Jurisdiction of SGST authority in case of illegal importation.

Detailed Analysis:

1. Dismissal of Writ Petition:
The appeal was filed against the dismissal of a writ petition seeking a mandamus to direct authorities to consider and dispose of the appellant's representations, release monetary compensation, and examine the release of lorries and trucks. The High Court found that the writ petition was dismissed as frivolous at the admission stage, leading to the appellant's appeal.

2. Recognition as Informant:
The issue of whether the appellant could be recognized as an informant under circulars issued by the Central Board of Excise & Customs was raised. The representations by the appellant alleged illegal imports of betel nuts into West Bengal, violating Customs Act provisions and a DGFT notification fixing tariff rates. The appellant claimed a loss of customs duties amounting to ?19.37 crores.

3. Leakage of Revenue and Illegal Importation:
The Court focused on determining if there was leakage of revenue due to illegal importation of betel nuts and whether any officials were involved in connivance with the importers. It was noted that the Customs and Excise Departments often initiate actions based on special intelligence without disclosing the sources of information.

4. Failure of Customs Department:
The Court expressed dissatisfaction with the Customs Department's inaction despite representations made by the appellant. The Court highlighted the need for effective action by the Customs Department in cases of suspected illegal importation.

5. Jurisdiction of SGST Authority:
During the proceedings, it was observed that the State Goods and Services Tax (SGST) Authority at Siliguri had dealt with the trucks and consignments in a case of alleged illegal importation. The Court questioned the jurisdiction of the SGST Authority to collect tax and levy penalties in such cases, emphasizing that the Customs Department should handle matters of illegal importation.

6. Decision and Directions:
The High Court decided to interfere with the order dismissing the writ petition and restored it for further consideration on merits. The appellant was granted liberty to implead the concerned authorities and the State Government as party respondents and to file additional documents and affidavits in the writ petition.

In conclusion, the High Court's judgment addressed various issues related to the dismissal of the writ petition, recognition of the appellant as an informant, alleged illegal importation of betel nuts, leakage of revenue, inaction of the Customs Department, and the jurisdiction of the SGST Authority in cases of suspected illegal importation. The decision allowed for a more thorough examination of the matter based on the presented evidence and representations.