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TMI Blog2018 (11) TMI 1503X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner consigned a load of Roja betel nut to the second petitioner, through the Exhibit P9 tax invoice, dated 22.09.2018. It entrusted the consignment to the ABT Parcel Service for transportation. Indeed, in the Exhibit P9 invoice, the first petitioner described the commodity with "HSN 0802", and paid the tax at 5%. The first petitioner also raised the Exhibit P10 e-way bill. 3. On 26.09.2018, the Assistant State Tax Officer (ASTO), the fourth respondent, intercepted the lorry when it reached Palakkad. The lorry had been carrying other goods, too. The ASTO detained the goods, alleging that the first petitioner's product fits the description "HSN 2106" and attracts 18% tax-not 5%. In other words, the ASTO detained the goods because the petitioners had allegedly been trying to evade tax by misdescribing the product. 4. Served with the Exhibit P11 detention notice, dated 26.09.2018, the petitioners' authorised representative met the ASTO and explained about the genuineness of the transport. He tried to impress upon the authority that there was neither misclassification nor evasion of tax. But the ASTO remained unconvinced. Aggrieved, the petitioners filed this Writ petition. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and release of goods. Classification-or rather misclassification-of a commodity is not within the scope of this writ; that issue goes beyond it. 11. In the end, Sri Mather underlines the difficulties the petitioners' face with frequent detention merely on the allegation of missbranding; he urges this Court to allow the writ petition. Respondents': 12. On the other hand, Dr. Thushara James, the Government Pleader, has straightaway drawn my attention to Section 129 of the Act. According to her, the ASTO has plenary powers under that Section to intercept any goods and detain them on any ground enumerated in that Section. 13. To match the forensic skills of the petitioners' counsel, Dr. James has not only made me test the samples of Roja betel nut but also displayed to me different arecanuts, beginning from the whole nut to the ground pieces of various sizes, as well as powder. 14. Dr. James too has spent much time on the distinction among the HSN codes, to hammer home her contention that the petitioners' product has been misbranded. According to her, the ASTO's entertaining a doubt about the misclassification and the exigibility of tax at a particular rate cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Works. Further granted, the Supreme Court in that has held that "by crushing betel nuts and processing them with spices and oils, a new product could be said to have come into being which attracted duty separately under the Schedule to the Tariff Act." 21. Then, the Court has held that the process of manufacture employed by the appellant company did not change the nature of the end product: "The betel nut remains a betel nut". Sri Mather has also produced literature before the Court, besides the brochures of supari producers, to underline what supari is and how it differs from mere betel nut powder or granules. 22. Dr. James is quick to contradict the petitioners' efforts to demonstrate that the product has never lost its character as betel nut, and that it attracts only the HSN Code mentioned in the invoices. According to her Crane Betal Nut Powder Works involves the interpretation of the Central Excise Tariff Act and the Rules. And that decision, according to her, does not apply here. She also stresses that the product description or classification has suffered changes in the new GST regime, compared to what it was under the KVAT Act. 23. But I am afraid the classification or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first petitioner's purchase and supply invoices. 28. The Exts.P8 and P8(a) are important; they are the first petitioner's recent GST returns for June and August, 2018. In those returns, the first petitioner has assigned the same HSN Code, as he did reflect in the Ext.P9 invoice. He paid tax only at 5%. Thus the documents before the assessing authority and those that accompanied the consignment accord with one another. 29. In this context, we may examine J.K. Synthetics Limited v. Commercial Taxes Officer (1994) 4 SCC 276. On how to interpret Tax Statutes, the Supreme Court has held that charging provisions must be construed strictly, but not the machinery provisions, "which should be construed like any other statute". It has also held that "the power to levy and collect interest is substantive law though part of machinery provision". 30. In J.K. Synthetics Limited the issue was whether the appellant should pay interest on the additional sales tax. The Revenue, as it has done here, contended that when the law enjoins on the Assessee to files a 'return', it can only mean a true and correct return, that is, a return which reflects the tax due on final assessment. The Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med that the Enquiry Officer was "satisfied" that there was attempt at evasion of tax. So the penalty followed. In this context, a learned Single Judge of this Court has observed that when there is scope for a genuine dispute regarding any liability for tax, the question of detaining the goods at the check-post or imposing penalty under Section 29A does not arise. There is a ground for a genuine dispute whether there was any taxable sale at all. Rams, then, further observes: "In such cases it is not for the check-post authority to act on mere suspicion and to find that there is any attempt at evasion of payment of tax, which alone vests him with the jurisdiction to act under S. 29A. At best, he can only alert the assessing authority in Ernakulam to initiate proceedings for assessment of any alleged sale, at which the petitioner will have all his opportunities to put forward his picas on law and on fact. The process of detention of the goods at the check post, cannot be resorted to in such cases when there is a bona fide dispute regarding the very existence of a sale and exigibility for tax. S. 29 A is not intended to subserve such an object. 35. I may examine the impugned Ext.P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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