2023 (9) TMI 1125 - HC - GST

Levy of penalty u/s 129 of the Kerala Goods and Services Tax Act, 2017 read with Rule 138 - valid documents not produced - evasion of tax - HELD THAT - In the absence of valid documents in possession of the person in charge of the goods would be treated as a willful act of evasion of tax. If the vehicle was not intercepted and goods were not verified, it would have lead to the leakage or evasion of the revenue by the dealer. On receipt of the show cause notice the dealer produced copies of the e-way bills and claimed that transport of goods was genuine and properly covered by the statutory documents. However on verification of the e-way bills, contrary to the their claim it was revealed that the vehicle mentioned therein and the vehicle through which the goods were attempted to be transported were distinct. The adjudicating authority was of the opinion that the dealer had not been able to convincingly explain the reasons for the discrepancy. Instead, after receipt of the Show Cause Notice it was contended by the dealer by fabricating a story that the local transporter failed to arrange the statutory requirements. The owners/dealers have to substantiate why the goods being transported did not accompanied the statutory documents. In view there of and considering the provisions of the Act was of the point that the dealer wilfully attempted to transport the goods without any documents and tried to evade the tax liability on the goods. The Show Cause Notice was adjudicated and the tax is single GST of Rs.1,20,000/- with same amount of penalty and twice the assessed amount as penalty was imposed by the impugned order. Considering the provisions of Section 129 of the Kerala Goods and Services Tax Act, 2017 read with Rule 138 of the Rules made thereunder and the facts of the case, the impugned order imposing the tax and penalty does not require any interference and therefore the writ petition fails and hereby dismissed.

Summary

Issues involved:
The case involves the impugning of a penalty order passed under Section 129 of the Kerala Goods and Services Tax Act, 2017 read with Rule 138 and the Rules made thereunder, due to the transportation of goods without the required statutory documents, leading to suspicion of tax evasion.

Details of the Judgment:

Issue 1: Transportation of Goods without Statutory Documents
The 2nd respondent intercepted a vehicle carrying spare parts and engine oil without the prescribed documents under the GST Act. The driver admitted to not having valid documents, triggering a Show Cause Notice for suspected tax evasion.

Issue 2: Response to Notice
The owner of the goods, M/s. EVM Passenger Cars India Pvt. Ltd., responded, explaining that the goods were transported from their Bangalore office with relevant documents but were not kept by the local transporter. They provided details of invoices and requested the release of the consignment.

Issue 3: Adjudication Proceedings
A writ petition directed the adjudication authority to complete the process within seven days. The authority inspected the goods again, emphasizing the necessity of valid documents for transportation. The lack of documents was deemed a willful act of tax evasion.

Issue 4: Discrepancy in E-way Bills
Although the dealer provided e-way bills later, discrepancies were found between the mentioned vehicle and the actual one used for transportation. The authority concluded that the dealer failed to explain the inconsistency convincingly.

Issue 5: Adjudication Outcome
The adjudicating authority held that transporting goods without statutory documents constitutes willful tax evasion. The dealer's attempt to justify the lack of documents post-notice was rejected, leading to the imposition of tax and penalty as per the impugned order.

Conclusion:
Considering the provisions of the GST Act and the facts of the case, the court upheld the impugned order imposing tax and penalty, stating that it does not warrant interference. As a result, the writ petition was dismissed.