2024 (10) TMI 120 - HC - GST

Seeking direction to the 2nd respondent to release the goods belonging to the petitioner - Attempt to evade tax - HELD THAT - The issues raised by the petitioner as reasons for the goods being transported in a vehicle other than the vehicle mentioned in the e-way bill and for the expiry of the e-way bill are matters that ought to have been considered by the competent authorities before imposing a penalty under Section 129 of the CGST/SGST Acts. If there was no attempt to evade tax and the discrepancies noted were on account of reasons beyond the control of the petitioner, this was also a matter that ought to have been considered by the original authority / Appellate Authority while passing orders. Though the petitioner may be justified in approaching this Court challenging the order of the Appellate Authority on account of the fact that the Tribunal has not been constituted under the provisions of Section 112 of the CGST/SGST Acts since the adjudication of the issues involve disputed questions of fact it may not be proper for this Court to entertain a challenge to the order passed by the Appellate Authority in a writ petition under Article 226 of the Constitution of India. The appeal filed by the petitioner will stand restored to the file of the Appellate Authority, who shall pass fresh orders, after affording a further opportunity of hearing to the petitioner - Ext.P7 order is quashed.

Summary

Issues:
1. Challenge to Ext.P7 Order of the Appellate Authority in W.P(C)No.7730 of 2022.
2. Seeking direction to the 2nd respondent to release goods belonging to the petitioner in W.P(C)No.15498/2021.

Analysis:

Issue 1: Challenge to Ext.P7 Order of the Appellate Authority
The petitioner, a dealer in medical devices, challenged Ext.P7 Order of the Appellate Authority, contending that the goods were intercepted due to discrepancies in the e-way bill. The petitioner argued that the vehicle number on the e-way bill differed from the actual vehicle carrying the goods, which was changed by the courier agency after an accident. Despite producing CCTV visuals to support the correct loading details, the appeal was dismissed. The Senior Government Pleader defended the penalty under Section 129 of the CGST/SGST Acts, stating the petitioner was aware of the vehicle change. The Court noted that if discrepancies were beyond the petitioner's control and not for tax evasion, authorities should have considered this before imposing penalties.

Issue 2: Seeking direction to release goods
The petitioner sought direction for the release of goods in W.P(C)No.15498/2021. The Court emphasized the need for authorities to consider reasons for discrepancies before penalizing under Section 129 of the CGST/SGST Acts. It observed that the Appellate Authority failed to address crucial aspects, indicating no tax evasion intent by the petitioner. While acknowledging the petitioner's challenge on tribunal constitution grounds, the Court ruled that challenging the Appellate Authority's order via writ petition was not appropriate. Consequently, the Ext.P7 order was quashed, and the appeal was restored for fresh consideration by the Appellate Authority, with specific instructions to consider relevant judgments cited by the petitioner.

In conclusion, the judgment highlighted the importance of considering circumstances beyond the petitioner's control before imposing penalties under tax laws. It emphasized the need for authorities to thoroughly assess all aspects and evidence presented by parties before making decisions.