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TMI Blog2021 (4) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... As is evident in the present case, if a Check Post Officer or Anti Evasion Officer intercepting the goods and vehicle while in transit, is permitted to carry on such fishing and rowing inquiry, it would impede, rather retard free flow of trade resulting in unnecessary and unwarranted harassment to the carrier of goods, so also to the consignor/consignee - Upon perusal of detention memo (Annex.8), so also Physical Verification Report (Annex.R/4), this Court finds that it is an admitted case of the respondent No.2 that all the documents prescribed under law were available and goods, including its weight, was found in order. Even, genuineness of the goods in transit per se is not in dispute inasmuch as, documents and e-way bill/other documents in relation to transit depicting the goods to be 34.120 tons of MS Scrap in quantity and the nature of goods on physical examination was found to be in accord. Having regard to the fact that goods and vehicle are lying stationed/detained with the respondent No.2 since 11.03.2021; inspection and physical verification of the goods including its weight has already been done. Hence, goods and vehicle are not required, at least for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that such fishing and rowing inquiry in relation to availment of input tax credit and suspicion about the purchase transaction is not within the domain of respondent No.2, while exercising powers under Section 68 of the CGST Act, 2017 (for short, 'the Act of 2017') while goods are in movement. It is argued by learned counsel for the petitioners that such inquiry, if at all, is necessary, the same is permissible to be done by regular Assessing Officer and not by the Anti Evasion Officer or any check-post incharge or flying squad. 6. While emphasizing that not only the detention, even the inquiry sought to be undertaken by the respondent No.2, is without jurisdiction, learned counsel for the petitioners points out petitioners' predicament that for getting release of vehicle and goods, provisions of Section 129 of the Act of 2017 read with Rules 140 and 141 of the Goods and Service Tax Rules, 2017 (for short, 'the Rules of 2017') require payment of tax and penalty or furnishing of a bank guarantee equal to the amount of applicable tax and penalty. He argues that in the facts of the present case, if the petitioners are required to pay the proposed amount or to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Majid Bilalbhai Akbani Vs. State of Gujarat (Special Civil Application No.12754/2020) to contend that in all similar cases, the Courts have either refused to interfere or has required the concerned petitioner to furnish bank guarantee in accordance with Rules 140 and 141 of the Rules of 2017. 11. During the course of arguments, Mr. Bhandari adverts to the provisions contained in Section 129 of the Act of 2017 and argues that on finding any violation of the provisions of the Act of 2017, the respondent No.2 is empowered to conduct inquiry and assess the tax/penalty. 12. Learned counsel cites a judgment of Hon'ble the Supreme Court in the case of State of U.P. Ors. Vs. Ram Sukhi Devi [2005 SCC (L S) 560] to argue that this Court cannot direct release of the goods/vehicles and grant final relief at the interim stage. 13. Having heard learned counsel for the parties, this Court is of prima facie view that the provisions of Sections 67, 68 and 129 of the Act of 2017 are required to be interpreted. The circular dated 13.04.2018, issued by the Central Board of Indirect Taxes and Customs though addresses the hardship being faced by the trade/industry on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be subject matter of violation/contravention of the statutory provision. 19. As far as applicable tax on the goods under consideration is concerned, the same has admittedly been appropriately charged and the goods and vehicle in transit are accompanied with the prescribed documents. Thus, in the prima-facie opinion of this Court, provision of Section 129 cannot be resorted to. It is moreso, when the allegation is, that the seller/consigner is seeking to avail wrong input tax credit. The incident or occasion of availing input tax credit is an event preceding the transaction in question and completely divorced from the movement/transit in question, which is in pursuance of inter-state sale from Jodhpur to Mandi Gobindgarh; transacting parties are different - H.R. Enterprises (Petitioner No.1) and Devbhoomi Castings (P) Ltd. 20. So far as judgment of Hon'ble the Supreme Court in case of M/s Kay Pan Fragrance (supra) is concerned, in the opinion of this Court, Hon'ble the Supreme Court passed the order dated 22.11.2019, having regard to the fact that various interim orders were passed by Allahabad High Court releasing the goods on furnishing of the solvent security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peared for the owner of goods and proposed penalty as high as 50% of the value of goods. As against this, he was firstly required to propose penalty under clause (a) of Section 129(1), which would have been equal to the amount of tax. Given that the penalty under clause (a) would have been ₹ 1,93,460/- and proposed penalty under clause (b) is ₹ 10,74,780/-, in the opinion of this Court, the statutory remedies will be inefficacious. Even, remedy relating to release of goods under Section 129(1)(c) of the Act of 2017 would be illusory. 27. Hence, issue notice. Issue notice of stay application also. 28. Mr. Sunil Bhandari accepts notices on behalf of the respondents and prays for two weeks' time to place on record the original report and documents sent by the jurisdictional assessing officer. 29. Having regard to the fact that goods and vehicle are lying stationed/detained with the respondent No.2 since 11.03.2021; inspection and physical verification of the goods including its weight has already been done. Hence, goods and vehicle are not required, at least for the purpose of inquiry. If they are detained for indefinite period, the condition of stationary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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