2023 (12) TMI 993 - HC - GST

Seizure of goods - Absence of proper documents for movement of goods - levy of IGST or CGST SGST - Levy of penalty - gold ornaments - goods meant for sale on approval basis for which delivery challan was issued by the supplier - person in charge of the goods could produce only a delivery note which was not a valid document for movement of goods - HELD THAT - The goods which are taken for supply on approval basis can be moved from the place of business of the registered supplier to another place within the same State or to a place outside the State on a delivery challan along with the e-way bill wherever applicable and the invoice may be issued at the time of delivery of goods. For this purpose, the person carrying the goods for such supply can carry the invoice book with him so that he can issue the invoice once the supply is fructified. The provisions of law does not provide for any substitute to the prescribed delivery challan. The Circular dated 18.10.2017 issued by the Department of Revenue, Central Board of Excise and Customs also indicates that there is no substitute for the prescribed delivery challan. Therefore, non-possession of prescribed delivery challan at the time of seizure of the goods weakens the case of the petitioner. The record also reveals that after seizure of the goods, the owner of the goods appeared before STO seeking release of goods on the plea that the goods in question were for sale on approval basis and therefore accompanied by a delivery note along with a letter from the consignor certifying that the goods were for sale on approval basis but the said letter was misplaced by the courier agency. In the absence of valid delivery challan as prescribed under the rules, tax and penalty was imposed upon the petitioner under Section 129 of the Act. The record further reveals that the petitioner had voluntarily agreed in writing to pay tax and penalty as is also evident from the perusal of order passed by the STO. Payment of tax and penalty by the petitioner clearly indicates that the person in charge of the goods was not having a valid delivery challan when the goods were intercepted by the State Taxes Officer. In so far as the contention of the learned counsel for the petitioner that the petitioner was made to sign on the blank papers under duress is concerned, the declaration supra indicates that same has not been signed under protest, as such, the plea of the learned counsel for the petitioner is only an afterthought - Once the petitioner in terms of the declaration declared himself as an owner and accepted the liability of tax and penalty then he is estopped in raising such kind of allegations against the respondents that too without any reasonable justification. The aforesaid two grounds viz. non possession of valid delivery challan along with document substantiating the stand of the petitioner that it was sent for approval at the time of seizure of the goods and payment of tax and penalty voluntarily deposited by the petitioner at the time of release of the goods are sufficient reasons to dismiss the case of the petitioner - there are no infirmity in the impugned orders - petition dismissed.

Summary

Issues Involved:
1. Validity of the detention and seizure of goods.
2. Applicability of tax and penalty under Section 129 of the GST Act, 2017.
3. Adequacy of the opportunity provided to the petitioner to present their case.
4. Validity of documents accompanying the transported goods.
5. Alleged coercion in obtaining payment from the petitioner.

Summary:

1. Validity of the detention and seizure of goods:
The petitioner challenged the order dated 07.01.2020 by the State Taxes Officer (STO) and the order dated 31.08.2022 by the Deputy Commissioner, State Taxes, Appeals-I, Jammu. The STO intercepted a vehicle carrying gold ornaments worth Rs. 77,96,650.10/- under Section 68(3) of the J&K GST Act, 2017, and found that the goods were accompanied by a delivery note, which was not a valid document for the movement of goods. Consequently, the vehicle and goods were detained under Section 129(1) of the Act.

2. Applicability of tax and penalty under Section 129 of the GST Act, 2017:
The STO imposed a tax of Rs. 116,965.00 under State/UT Tax and CGST Act each, along with a penalty of Rs. 233,930/-. The petitioner appealed under Section 107 of the State/UT Goods and Services Act but the appellate authority dismissed the appeal, stating that the delivery note was not a prescribed document under the rules, and the STO's order was justified.

3. Adequacy of the opportunity provided to the petitioner to present their case:
The petitioner argued that the STO did not provide a proper and reasonable opportunity to present their case and failed to follow the procedure as per the GST Circular dated 13.04.2018. However, the appellate authority found no merit in these contentions and upheld the STO's order.

4. Validity of documents accompanying the transported goods:
The court examined Rule 55 of the J&K GST Rules, 2017, and found that the delivery note accompanying the goods was not a valid document. The petitioner argued that a letter from the consignor certifying the sale on approval basis was misplaced by the courier agency, but this was denied by the courier agency. The court concluded that the delivery note was neither prescribed nor mandatory, and the petitioner failed to produce a valid delivery challan.

5. Alleged coercion in obtaining payment from the petitioner:
The petitioner claimed that the STO obtained a cheque forcibly under the threat of dire consequences. However, the court noted that the petitioner had voluntarily agreed in writing to pay the tax and penalty, and the declaration made by the petitioner indicated no coercion. The court found this contention to be an afterthought and dismissed it.

Conclusion:
The court dismissed the writ petition, finding no infirmity in the impugned orders. The petitioner's failure to possess a valid delivery challan and the voluntary payment of tax and penalty were sufficient reasons for the dismissal. The court upheld the STO's and appellate authority's decisions, emphasizing the importance of adhering to prescribed documentation and procedures under the GST Act.