2024 (3) TMI 897 - HC - GST

Seeking refund of the amount deposited as penalty - intent to evade tax or not - Challenged the physical inspection and verification report - Penalty - detention on the ground that address of the consigner not found during the inspection carried out at his place of business - HELD THAT - It is well settled principle of law that in order to invoke proceedings u/s 129(3) of the Act, the intention to evade tax is mandatory. In this context, the judgment of the Hon ble Supreme Court in Assistant Commissioner (ST) Ors. v. M/s. Satyam Shivam Papers Pvt. Limited Anr. 2022 (1) TMI 954 - SC ORDER is relevant. The same view has been taken by different High Courts. It is also noted that under Rule 138A of the CGST Act, 2017, the person in charge of the conveyance shall carry (a) the invoice or bill of supply or delivery challan and (b) a copy of the e-way bill or the e-way bill number. In this case, the petitioner was carrying all the requisite documents as required in law at the time of carrying the goods. It is the case of the petitioner that the seller has already made payments towards his tax liability. Hence, there is no question of any evasion of tax liability. This fact has not been disputed by learned counsel for the respondent. Hence, this Court is of the considered view that no special purpose will be served by delegating the present matter to the appellate authority. In view thereof, this Court deems it appropriate to allow the present writ petition and set aside the impugned physical inspection and verification report dated 21.12.2023, detention order dated 23.12.2023, penalty order dated 25.12.2023 and all other purported proceedings initiated therein. Thus, the writ petition is disposed of.

Summary

Issues involved:
The present writ petition challenges physical inspection, detention order, penalty order, and other proceedings initiated against the petitioner.

Details of the Judgment:

Issue 1: Detention of Goods
The petitioner purchased M.S. scrap and had all necessary documents, yet goods were detained due to the absence of consigner's address. The detention order was challenged as the petitioner had already paid tax, and intent to evade tax is mandatory for invoking Section 129(3) of the CGST Act. The court referred to relevant judgments and held that carrying requisite documents absolves the petitioner from tax evasion allegations.

Issue 2: Alternative Remedy
The respondent argued that the petitioner should have pursued an appeal instead of a writ petition. However, the court noted the settled law that no special purpose would be served by delegating the matter to the appellate authority, and hence allowed the writ petition, setting aside all impugned proceedings.

Relief Granted
The court directed the respondents to refund the amount recovered from the petitioner within four weeks and disposed of the writ petition with the above directions.