2024 (4) TMI 950 - HC - GST

Validity Of order passed by the competent authority in purported exercise of powers u/s 129 (3) - detention of the goods and vehicle - stock transfer - Penalty - Demand of applicable tax - HELD THAT - The short contention is that the detained goods were being transported as part of a stock transfer. The goods were not being moved in pursuance to any sale or purchase. The goods were not liable to tax. The detention of the goods and imposition of tax and penalty were unlawful. According to the learned counsel for the petitioner, the aforesaid ground has not been considered by the appellate authority while rejecting the appeal of the petitioner. Thus, the ground raised by the petitioner merits consideration by the appellate authority in the first instance. Clearly, the appellate authority has failed to do so. Failure of the appellate authority to advert to the said objections of the petitioner, reflects non application of mind to germane issues and vitiates the impugned order passed by the appellate authority. The impugned order dated 28.12.2020 passed by the appellate authority is consequently set aside. The writ petition is allowed to the extent indicated above.

Summary

Issues involved: Detention of goods u/s 129(3) of GST Act, imposition of tax and penalty, failure of appellate authority to consider petitioner's objection.

The petitioner challenged the order detaining goods and imposing tax and penalty u/s 129(3) of the GST Act. The appellate authority dismissed the petitioner's appeal without considering the contention that the detained goods were part of a stock transfer and not liable to tax. The Hon'ble Court found that the appellate authority failed to address this crucial objection, indicating a lack of application of mind to relevant issues. Consequently, the impugned order was set aside, and the matter was remitted to the appellate authority for fresh consideration within two months.

The key contention of the writ petitioner was that the detained goods were being transported as part of a stock transfer and were not subject to tax. The failure of the appellate authority to address this argument was deemed as a non-application of mind to essential issues, leading to the setting aside of the order and remittance of the matter for reevaluation.

The Hon'ble Court found that the appellate authority did not consider the petitioner's objection regarding the nature of the goods being transported, which was crucial to determining their tax liability. As a result, the impugned order was set aside, and the appellate authority was directed to reexamine the matter within a specified timeframe.

The writ petition was allowed to the extent that the impugned order detaining goods and imposing tax and penalty was set aside due to the failure of the appellate authority to address the petitioner's argument that the goods were not liable to tax as they were part of a stock transfer.