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TMI Blog2020 (3) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... cers and nothing beyond. In the present case, it is a case of bonafide miscalculation as to whether the goods would be exigible to 12% or 28% - Similar question was considered in the case of Synergy Fertichem [ 2019 (12) TMI 1213 - GUJARAT HIGH COURT ] In case of a bonafide dispute with regard to the classification between a transitor of the goods and the squad officer, the squad officer may intercept the goods and detain them for the purpose of preparing the relevant papers for effective transmission to the judicial assessing officers and nothing beyond. The impugned order of detention Ext.P1 and consequential notice Ext.P2 in Form GST MOV-07 are not sustainable and hereby quashed - The goods are directed to be released to the petitioner with a further direction that the inspecting authority of Kerala would prepare a report and submit the same to the assessing authority, Tamil Nadu for taking action, if deem it appropriate, in accordance with law - Decided in favor of petitioner. - Mr. Justice Amit Rawal For the Petitioner : Shri. Navaz P.C., Shri.Prabhakaran P.M. And Sri. Karthik S. Nair For the Respondent : GP DR Thushara James JUDGMENT The petitioner a Private Limited Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts like invoice and E-way bills but infact, there was no discrepancy in respect of the quantity or description of the goods mentioned in the tax invoice. The only reason for detention was that the lemon drinks were not correctly classified and liable to be tax as 28% and not under 22029920 attracting 12% of GST. c. In support of the aforementioned contention the learned counsel for the petitioner has relied upon the decision of this Court in N.V.K Mohammed Sulthan Rawtger and Sons vs. Union of India Ors., (2018 -VIL-502-KER) and also the Division Bench judgment of the Hon'ble Gujarat High Court in Synergy Fertichem Pvt. Ltd. v. State of Gujarat (2019-VIL-623-GUJ). 3. Per contra, the learned Government Pleader opposed the aforementioned prayer of the petitioner by relying upon Section 129 of the CGST Act, starting with a non-obstante clause that the officers are empowered in case any person transporting any goods while they are in transit in contravention of the provisions of the Act or the rules made thereunder, such goods and conveyance shall be liable to detention or seizure. They shall be released on the conditions enumerated in clauses (a) to (c) of Section 129 and as per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,- (a) on payment of the applicable tax and penalty equal to one hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty; (b) on payment of the applicable tax and penalty equal to the fifty per cent. of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty; (c) upon furnishing a security equivalent to the amount payabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entuality, the correct procedure which the inspecting authority is Expected to follow is to alert the Assessing Authority to initiate the proceedings for assessment of any alleged sale at which the dealer will have his opportunities to put forward his pleas on law and on fact. What we want to convey is that the process of detention of the goods cannot be resorted to when the dispute is bona fide especially concerning the exigibility of tax and, more particularly, the rate of that tax. In the aforesaid context, we may refer to and rely upon a decision of the Kerala High Court in the case of N.V.K. Mohammed Sulthan Rawtger Sons Dindigul, Tamil Nadu, Represented by Managing Partner, Raja Mohammed Ors., vs. Union of India Ors., reported in (2019) 61 GSTR 307-2018-VIL-502-KER, wherein a learned Single Judge of the Kerala High Court observed as under; 24. Detention under the KSGST Act has an elaborate remedial mechanism. Now, we focus on the release of the product, and it lies in narrow confines, Suffice it for me to examine this singular issue: Can the State Tax Officer invoke Section 129 of the Act and detain goods on the ground the tax paid on the product is less? Here, the documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 Supreme Court in that context has held that the information to be furnished in the return must be 'correct and complete', that is, true and complete to the best of knowledge and belief, without the dealer being guilty of willful omission. The dealer, according to J. K. Synthetics Limited, must deposit the full tax due, based on the information furnished. And that information must be correct and complete to the best of the dealer's knowledge and belief. If the dealer has furnished full particulars regarding his business, without willfully omitting or withholding any particular information affecting the assessment of tax, and if he honestly believes to be 'correct and complete', the dealer is said to have acted 'bona fide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 29A is not intended to subserve such an object. 35. I may examine the impugned Ext.P11 notice, or in other words the act of detention, in the light of the dicta in J.K. Synthetics Limited and Rams. In the former, the Supreme Court has emphatically held that if the dealer furnishes all particulars about his business, assesses the tax as he honestly believes to be correct, and pays it; his conduct cannot be faulted as mala fide or as an effort to evade tax. Here, the Exts.P8 and P8(a) are the returns for two recent months. The first petitioner declared the HSN Code he has felt his product would attract and paid the tax accordingly. The returns are very much on record before the assessing officer. Therefore, to that extent the first petitioner's conduct cannot be faulted, nor can he be accused of evading the tax. 36. Then, I may ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecanuts)' and registered with the Tamil Nadu under the Goods and Service Tax Act. The goods were intercepted by the inspecting authority to be in contravention of the misbranding. By relying upon the decision in J.K Synthetics Limited V. Commercial Taxes Officer, 1994 (4) SCC 276 , it was held that the charging provisions must be construed strictly but not the machinery provisions which would be construed like any other statute. 8. The upshot of the reasoning aforementioned is that the impugned order of detention Ext.P1 and consequential notice Ext.P2 in Form GST MOV-07 are not sustainable and hereby quashed. The goods are directed to be released to the petitioner with a further direction that the inspecting authority of Kerala would prepare a report and submit the same to the assessing authority, Tamil Nadu for taking action, if deem it appropriate, in accordance with law. APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF DETENTION ORDER DATED 31.01.2020 IN FORM GST MOV-06 PASSED BY THE FIRST RESPONDENT EXHIBIT P2 TRUE COPY OF THE NOTICE DATED 31.01.2020 ISSUED IN FORM GST MOV-07 BY IST RESPONDENT EXHIBIT P3 TRUE COPY OF THE LETTER DATED 19.02.2019 TO DEPUTY COMMIS ..... X X X X Extracts X X X X X X X X Extracts X X X X
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