2022 (3) TMI 852 - HC - GST

Detention of goods alongwith vehicle - appellant who is the wife of the deceased dealer has paid 100% of the disputed tax and further 10% of the disputed tax - HELD THAT - The prima facie conclusion arrived at by the learned Single Judge was on account of the fact that as of now the GST Tribunal is not functional and had the avenue of appeal been available to the appellant, the appellant would have been required to pay 100% of the admitted tax and 10% of the disputed tax for her appeal to be entertained. The technical objection raised by the appellant has to be agitated before the learned Single Judge as the appellant has been given an opportunity to file an affidavit-in-opposition. All that is required to be seen is whether the interest of revenue has been reasonably safeguarded. In our considered view, the respondent having paid the 100% of the admitted tax and further 10% of the disputed tax, the interest of revenue has been safeguarded, for the present. Appeal dismissed.

Summary

Issues:
Challenge to detention order of goods, application of Section 129 of the CGST Act, 2017, liability of legal representatives in case of death of a registered dealer.

Analysis:
The High Court of Calcutta heard an appeal filed by the State against an order in a writ petition involving the detention of goods belonging to the wife of a deceased registered dealer. The detained goods were two trucks containing steel and other products. The interim order issued by the Single Judge directed the release of the goods as the appellant, the wife of the deceased dealer, had paid 100% of the disputed tax and 10% of the disputed tax. The Court noted that the GST Tribunal was not functional, and if the appellant had the avenue of appeal, she would have been required to pay a certain amount for her appeal to be entertained.

The State contended that under Section 129 of the CGST Act, 2017, the penalty would be 200% of the tax, and as the appellant was not a registered dealer, the revenue could not recover the balance without further security measures. The respondent, representing the deceased dealer, was in the process of registering herself as a dealer in place of her husband, as per Section 93 of the W.B.GST Act, 2017, which addresses the liability of legal representatives in case of a registered dealer's death.

The Court held that technical objections raised by the appellant should be addressed before the Single Judge, ensuring the interest of revenue is safeguarded. Since the respondent had paid the required taxes, the revenue's interest was considered protected for the time being. The Court clarified that the decision should not be treated as a legal precedent, as it was based on specific facts, including the respondent's status as the deceased dealer's wife and her pending formal recognition as a dealer.

Consequently, the appeal and connected application were dismissed, directing the appellant to comply with the Single Judge's order by a specified date. Both parties were granted the liberty to raise issues and file necessary documents in the writ petition.