2023 (5) TMI 965 - HC - GST

Detention of goods - Territorial Jurisdiction - Interstate sale or local sale - it is the grievance of the petitioner, neither the U.P. State authorities have any jurisdiction to detain and seize the goods nor that power has been exercised validly - HELD THAT - Having perused the record, in the context of a fiscal statute where statutory remedy of appeal is available and issue of jurisdiction arises not by way of inherent and complete lack of jurisdiction but because of facts that the petitioner alleges exist, as are doubted by the revenue authority, we do not find it an appropriate case to offer interference at this primary stage. Once statutory remedy of appeal is provided, it does not become a matter of choice with the assessee to approach either the appellate authority or the High Court in its exercise of extra ordinary jurisdiction under Article 226 of the Constitution. Since in the present case, facts are in dispute, as would require consideration amongst other as to existence or otherwise of the consigner/dealer, genuineness of the transaction of insterstate trade, we would not like to hasten to a conclusion of inherent lack of jurisdiction. Thus, thus is not a fit case to exercise our inherent power under Article 226 of the Constitution. More efficacious and speedier remedy may be available under the statute itself, in the facts of the case. Petition dismissed.

Summary

Issues involved:
Challenge to the detention of goods during transportation; Allegation of fake Tax Invoice; Jurisdiction of U.P. State authorities to detain and seize goods; Demand of penalty from petitioner; Availability of statutory remedy of appeal.

Detention of Goods:
The petitioner challenged the action taken by revenue authorities to detain goods, specifically aluminum wire rod being transported from Delhi to Punjab through U.P. The goods were accompanied by a valid Tax Invoice and e-way bill issued by the consigner/dealer in favor of the petitioner. The truck carrying the goods was detained by the Assistant Commissioner in Ghaziabad for verification.

Allegation of Fake Tax Invoice:
A show cause notice was issued to the driver of the truck, alleging that the Tax Invoice accompanying the goods was fake. This allegation arose from information indicating that the consigner's registration had been suspended and its purchases were questionable. The petitioner responded to the doubts raised but claimed that no appropriate order was passed or served on them. Subsequently, a significant penalty of Rs. 72,44,288/- was demanded from the petitioner.

Jurisdiction Issue:
The petitioner contended that the U.P. State authorities did not have the jurisdiction to detain and seize the goods, and even if they did, the power was not exercised validly. The petitioner argued that the demands and actions were unjustified, and the authorities did not have the authority to impose penalties without proper orders or service.

Statutory Remedy of Appeal:
The Standing Counsel argued that the order passed was appealable and suggested that all issues could be raised by the petitioner before the appellate authority. The court, after considering the arguments and perusing the record, noted that in cases involving fiscal statutes where a statutory remedy of appeal exists, interference at the initial stage might not be appropriate.

Court's Decision:
The court dismissed the petition, emphasizing that when a statutory remedy of appeal is available, the petitioner must exhaust that remedy before seeking extraordinary jurisdiction under Article 226 of the Constitution. Given the disputed facts regarding the consigner, the transaction's genuineness, and other relevant issues, the court deemed it premature to conclude a lack of jurisdiction. The petitioner was advised to pursue their statutory remedies for a more effective and expeditious resolution.