2025 (2) TMI 358 - HC - GST

Seeking to call for the records relating to the impugned order - goods detained on the ground of non-generation of e-invoice - HELD THAT - Snce the impugned order has been passed without taking into consideration of the Circular No.10/2019 dated 31.05.2019 whereby according to the petitioner the benefit available under the said Circular has not been given effect to by the respondent in entirety this Court is inclined to set aside the impugned order and remand the matter back to the respondent for re-consideration. Petition disposed off by way of remand.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issues considered in this case are:

1. Whether the impugned order imposing a penalty for non-generation of an e-invoice was validly passed, given the circumstances presented by the petitioner.

2. Whether the Circular No.10/2019 dated 31.05.2019, issued by the Commissioner, Commercial Tax, was applicable to the petitioner's case and if it was duly considered by the respondent while passing the impugned order.

3. Whether the petitioner is entitled to the release of the detained consignment upon deposit of a certain amount pending reconsideration of the order.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of the Impugned Order

- Relevant legal framework and precedents: The legal framework involves the requirement for businesses to generate e-invoices for business-to-business transactions as per the applicable tax regulations. The imposition of penalties for non-compliance is governed by these regulations.

- Court's interpretation and reasoning: The Court observed that the impugned order was passed without considering the Circular No.10/2019, which could potentially impact the applicability of the penalty.

- Key evidence and findings: The petitioner argued that the failure to generate the e-invoice was due to technical glitches and a public holiday, and that the e-invoice was generated on the next working day. The respondent acknowledged that the circular was not considered in the initial decision.

- Application of law to facts: The Court found that the respondent's failure to consider the circular may have led to an incorrect imposition of the penalty, necessitating a reconsideration of the order.

- Treatment of competing arguments: The petitioner argued for the setting aside of the penalty due to mitigating circumstances, while the respondent agreed to a remand for reconsideration in light of the circular.

- Conclusions: The Court concluded that the impugned order should be set aside and the matter remanded for fresh consideration, taking into account the circular.

Issue 2: Applicability of Circular No.10/2019

- Relevant legal framework and precedents: Circulars issued by tax authorities can provide guidance and relief in certain situations, affecting the imposition of penalties.

- Court's interpretation and reasoning: The Court recognized the potential relevance of Circular No.10/2019 to the petitioner's case and noted that its non-consideration could have affected the decision-making process.

- Key evidence and findings: The petitioner's reliance on the circular was acknowledged by both parties, with the respondent conceding that it was not considered initially.

- Application of law to facts: The Court determined that the circular's provisions should be evaluated to ascertain any relief available to the petitioner.

- Treatment of competing arguments: The petitioner emphasized the circular's relevance, while the respondent agreed to reassess the case in light of it.

- Conclusions: The Court directed the respondent to reconsider the matter, explicitly taking the circular into account.

Issue 3: Release of Detained Consignment

- Relevant legal framework and precedents: Provisions for the release of detained goods upon deposit of a specified amount are often included to prevent undue hardship to the affected party.

- Court's interpretation and reasoning: The Court acknowledged the potential damage and depreciation of the detained goods and provided a conditional release mechanism.

- Key evidence and findings: The petitioner expressed willingness to deposit a sum for the release of the consignment, which the respondent did not oppose.

- Application of law to facts: The Court balanced the need for compliance with the mitigation of potential loss to the petitioner.

- Treatment of competing arguments: The Court noted the respondent's agreement to the conditional release upon deposit.

- Conclusions: The Court ordered the release of the goods upon the petitioner's deposit of Rs. 10 Lakhs, pending final determination.

SIGNIFICANT HOLDINGS

- The Court set aside the impugned order due to the respondent's failure to consider Circular No.10/2019, which was crucial to the petitioner's defense.

- The Court established the principle that relevant circulars must be considered in penalty imposition cases, reinforcing the importance of procedural fairness and thorough consideration of applicable guidelines.

- The Court directed the respondent to reconsider the case within a specified timeframe, ensuring expedited resolution and minimizing potential losses to the petitioner.

- The Court provided a mechanism for the interim release of the detained consignment, balancing the interests of compliance with the prevention of undue hardship to the petitioner.