2023 (1) TMI 497 - HC - GST

Detention order - mismatch between the goods in movement and documents tendered - obtaining registration under the WBGST Act by means of fraudulent documentation - fabrication of tax invoices generated in support of movement of the goods - transport of teak sawn timber without valid documents in a concealed manner in contravention of Section 68 of CGST Act 2017 and WBGST Act 2017 read with Section 138A thereof - HELD THAT - The appellant would be free to produce all documents in respect of their contentions and also establish that he is the rightful owner of the goods and goods were transported with valid documents and the registration was obtained by producing valid documents. If there is any discrepancy in the nature of goods the State Tax Authority is directed to obtain opinion from the Forest Department by requesting one of their officers to inspect the goods in the place where it has been detained. On such application being filed the concerned authority shall afford an opportunity of personal hearing to the appellant or his authorized representative and to pass a reasoned order on merits and in accordance with law. Since the goods being natural produce, it is exposed to the fury of weather, there is likelihood of deterioration. Therefore the authority pending compliance of the above directions shall permit the appellant to provide requisite number of tarpolene for securing the goods so that the goods are not exposed to sun and rain. The appellant is directed to file the said application within a period of one week from the date of receipt of the server copy of this order after which the authority is granted 10 working days time to afford a personal hearing to the appellant and pass a speaking order on merits and in accordance with law. Appeal disposed off.

Summary

Issues:
1. Challenge to detention order under Section 129(1) of CGST Act and WBGST Act.
2. Allegations of mismatch between goods and documents, fraudulent registration, and fabricated tax invoices.
3. Dispute over ownership of goods and validity of transportation.
4. Confiscation proceedings and remedy available to the appellant.
5. Directions to the State Tax Authority for inspection and decision-making process.
6. Provision of tarpolene for securing goods from weather damage.
7. Clarification that the court did not delve into the merits of the case.

Analysis:
The High Court of Calcutta heard an intra-Court appeal challenging a detention order dated 10th August 2022 under Section 129(1) of the CGST Act and WBGST Act. The appellant contested the detention order, arguing against allegations of mismatch between goods and documents, fraudulent registration, and fabricated tax invoices. The court noted multiple allegations, including the transportation of teak sawn timber without valid documents, leading to the detention of goods and conveyance under Section 129 of GGST/SGST Act, 2017. The appellant claimed ownership of the goods with valid permits and documentation, disputing the fraudulent registration accusation. Confiscation proceedings had not commenced, and the goods were detained and seized pending resolution.

The Government Counsel highlighted the lack of clarity regarding the goods' ownership, creating an ID in the driver's name for communication purposes. The court directed the appellant to address the allegations in the detention order and prove ownership and valid transportation through appropriate documentation. The State Tax Authority was instructed to involve the Forest Department for inspection if needed and provide a fair hearing to the appellant or their representative. Due to the goods' perishable nature, the appellant was permitted to provide tarpolene for protection against weather damage within a specified timeframe.

The court emphasized that it did not assess the case's merits, leaving the decision-making process to the relevant authority. The appeal was disposed of, along with the connected application, without imposing any costs. The judgment provided a procedural framework for resolving the dispute, ensuring a fair opportunity for the appellant to present their case and address the detention order's allegations effectively.