2023 (1) TMI 983 - HC - GST

Detention of petitioner's goods - whether there is an error in the E-Way Bill inasmuch as it does not reflect the name of the consignee but merely mentions the petitioner s GSTIN number, or not? - HELD THAT - Admittedly, there has been no mismatch in the quantity of the goods found in the vehicle and the invoice produced. However, according to the respondents, the goods were not accompanied by an E-Way Bill. Although this is stated in the counter-affidavit, the said fact does not find mention in the order of demand dated 23.10.2020 or the order dated 31.12.2021, passed by the Appellate Authority. The learned counsel for the petitioner also submits that there is an error in the E-Way Bill inasmuch as it does not reflect the name of the consignee but merely mentions the petitioner s GSTIN number. She submits that the E-Way Bill is required to be read with the two invoices one invoice raised by M/s Mahendra Steels addressed to the petitioner and the second raised by the petitioner in the name of S.K. Integrated Consultants. She contends that if these documents are viewed in conjunction with one another, it would be clear that any error in the documents is only a minor error and the petitioner cannot be penalised by imposition of tax on the goods as well as penalty of an equivalent amount. We are unable to accept that the order of demand and penalty is a consent order and the petitioner was precluded from challenging the same. The goods had been detained and it is not disputed that the same would not have been released unless the tax and penalty was paid. We are persuaded to accept that the petitioner had paid the tax and penalty for release of the goods and the said payment was not voluntary - it is apparent that neither the show cause notice nor the order of demand clearly sets out the reason for imposing the tax liability as well as penalty. It would be apposite to remand the matter to the concerned GST officer to decide afresh after giving the petitioner full opportunity to address the allegation against him - Order raising a demand of tax and penalty, is set aside - matter is restored to the file of the concerned GST Officer.

Summary

Issues:
Detention of goods under Section 129(1) of the Goods & Services Tax Act, 2017, demand of tax and penalty, appeal dismissal by Appellate Authority, discrepancy in E-Way Bill and goods movement, lack of specific reasons for detention, consent order contention, remand for fresh decision.

Analysis:

1. Detention of Goods and Demand of Tax and Penalty:
The petitioner challenged the detention of goods and the demand of tax and penalty imposed under Section 129(1) of the GST Act. The petitioner argued that the E-Way Bill generated for transporting the goods clearly mentioned the petitioner's GSTIN number, even though the consignment was being sent to another party. The detention was based on alleged defective documents, with the authorities claiming a mismatch between the E-Way Bill and the goods in movement. However, the petitioner contended that there was no discrepancy in the quantity of goods found in the vehicle and the invoice produced. The lack of specific reasons for detention in the orders raised concerns regarding procedural fairness.

2. Appeal Dismissal by Appellate Authority:
The petitioner's appeal against the detention and tax penalty was dismissed by the Appellate Authority, which upheld the detention order. The Appellate Authority found the proper officer's order legally justified, citing a mismatch between the E-Way Bill and goods movement as the basis for penalizing the petitioner. The appellate order lacked detailed reasoning on the discrepancy and did not specify the defect in the documents accompanying the goods, leading to ambiguity and raising questions about the validity of the decision.

3. Contention of Consent Order and Remand for Fresh Decision:
The respondent argued that the order raising tax and penalty was a consent order, implying that detailed reasons were not necessary. However, the petitioner disputed this claim, stating that payment was made under compulsion due to goods detention. The court rejected the consent order contention, emphasizing that the petitioner had paid the tax and penalty to secure the goods' release. Given the lack of clarity in the original orders and the need for procedural fairness, the court decided to set aside the orders and remand the matter to the GST officer for a fresh decision. The court directed the officer to issue a new show cause notice and provide the petitioner with a full opportunity to address the allegations before making a decision.

In conclusion, the High Court set aside the order raising tax and penalty, as well as the Appellate Authority's decision, and restored the matter to the GST officer for a fresh determination. The court emphasized the importance of providing a fair opportunity to the petitioner to address the allegations and directed the officer to issue a new show cause notice within a specified timeframe.