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TMI Blog2020 (12) TMI 1338X X X X Extracts X X X X X X X X Extracts X X X X ..... t Manager that he has to close the Shop at 6.00 p.m. In the normal course, the Shop is closed as per the closing time, in which case, the petitioner used to work for more than two hours from the closing time, to take the details of the stocks available and sale during the day and to close the day accounts and the sale amount shall be remitted on the next working day before 4.00 p.m. 3. In the present case, as the petitioner was compelled to shut down the Shop by 6.00 p.m., the petitioner was decided to close the day account by 4.00 p.m., on 24.03.2020 so as to enable the petitioner to count the total sales amount and to intimate the same to the concerned District Managers through SMS, which is the usual practice that would be followed in the normal course. As there was a huge rush in the shop to buy the liquors by the public, due to the reason of announcement of sudden lock down, the Supervisor along with the Salesman had concentrated on the sale of the liquors, the petitioner was not able to close the day account for the sales made between 4.00 p.m. and 6.00 p.m., on 24.03.2020, due to the reason that the petitioner was compelled to shut down the Shop by 6.00 p.m., and therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een 4.00 p.m. and 6.00 p.m. on 24.03.3030, as the same was not able to remit immediately due to the reason that the petitioner was compelled to shut down the Shop at 6.00 p.m., on 24.03.2020 and hence, the said amount was kept at the Shop in a safe custody. 7. On 28.07.2020, the third respondent has passed the impugned order, arbitrarily, without providing any opportunity to the petitioner to establish his case, imposing penalty as per Clause 7(b) (xiv) of Prevention and Detection of Fraudulent Acts in Tamil Nadu State Marketing Corporation Limited, 2014 (hereinafter called as Code, 2014). 8. The learned counsel appearing for the petitioner would submit that the third respondent has passed the impugned order, dated 28.07.2020, for recovery of penalty along with interest and GST, without conducting a domestic enquiry. The District Manager has misconstrued the after sale amount remitted by the petitioner as the shortage amount. Though the petitioner has elaborately given a reply that the said amount was not a shortage amount as construed by the respondents, but it was the after sale amount that was occurred on 24.03.2020 between 4.00 p.m. and 6.00 p.m., without considering the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on this ground. 13. Secondly, the learned counsel for the petitioner made a strong objection that the respondent is not entitled to impose GST on the penalty amount under the disciplinary proceedings in terms of Section 7(b)(xiv) of the Code in the absence of any provision in the said Section about the collection of the GST. Hence he submitted that the collection of GST was illegal. 14. Further, one of the counsels viz., Mr.Suresh Kumar, who is appearing in the batch of writ petitions also submitted that in a disciplinary action, no GST can be collected in respect of the penalty imposed under the Code, as the respondent is not entitled to collect the same, without any specific provision in the Code. 15. Mr.R.V.Rajkumar, learned counsel appearing for the petitioners in W.P.(MD).Nos.13770, 13773, 13776 and 13779 of 2020 submitted that in the present case, a show cause notice was issued for collecting the GST in terms of Section 7(1) (d). Most of the impugned orders were passed on 14.09.2020 and some of the orders were passed in the month of August 2020, whereas Section 7(1) (d) was omitted with effect from 01.07.2018, by Section 3 of the CGST Amendment Act, 2018 and further, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the respondents would submit that as per the Rules and Regulations, whatever the sales occurred in the previous day, the Supervisor is required to deposit the sale amount in the next working day before 4.00 p.m. In the present case, admittedly, the petitioner has deposited the sale amount in the next working day, after the lock down, only for the sales made up to 4.00 p.m. and he has not remitted any amount with regard to the sales made between 4.00 p.m. and 6.00 p.m. The petitioner has to inform the same to the respondents as per the Rule framed with regard to the sales made on the particular day. However, in the present case, though the petitioner has informed the sales made up to 4.00 p.m., by way of SMS, he has not informed anything about the sales made between 4.00 p.m. and 6.00 p.m. Even assuming that if any sales have been made, it is the duty of the petitioner to inform the same to the respondents by way of SMS and even assuming that if he was not able to count due to the lock down from 6.00 p.m. on 24.03.2020, at least he would have informed that he has sold the stock between 4.00 p.m. and 6.00 p.m. and no counting was made with regard to the sales amount between 4.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been inserted in the form of Section 7(1A) of the Act. Therefore, though the third respondent has inadvertently issued the show cause notice by referring to Section 7 (1), it would be construed as a show cause notice issued under Section (1A) for the collection of GST. He would further submit that the petitioner is liable to pay GST, because he has not acted upon as per the advise of the respondents. Therefore, the third respondent has imposed the penalty. Further, the learned Standing counsel appearing for the respondents referred to the judgments with regard to the point for admission made on the part of the petitioner and the same need not be proved once again by way of domestic enquiry and on the aspect of imposition of GST on the penalty. In support of his contention, he has referred the following judgments. (i) Bajaj Finance Limited vs. Jurisdictional Officer State Tax Officer, Pune reported in (2019 SCC Online Mah AAAR -GST 27) (ii) in the matter of Dholera Industrial City Development Project Limited reported in (2019 SCC Online Guj AAR-GST 11) (iii) In the matter of TP Ajmer Distribution Limited reported in 2018 SCC Online Raj AAAR - GST 2 (iv) Himachal Prad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock was transferred to a godown/Marriage Hall. When the shop was allowed to open and transfer the stocks to the respective godowns/marriage hall, where the stock audit was conducted by the respondents and found that there was a shortage in the stocks. When the same was informed to the petitioner, he immediately made reply stating that the said amount is not a shortage but it was after sales amount made between 4.00 p.m. and 6.00 p.m. on 24.03.2020. 25. When the respondents opened the shop for the purpose of shifting the stocks and stock verification, the petitioner had an opportunity to enter into the shop and to verify the collections that have been made, out of the sales occurred in between 4.00 p.m. and 6.00 p.m. on 24.03.202 and to finalise the day accounts for the sales occurred between 4.00 p.m. to 6.00 p.m. on the day of lock down announcement. Subsequent to the finalisation of the day account, he immediately contacted the District Manager but he has not given any permission to deposit the after sales amount in the bank, therefore, it appears that there was a delay of one or two days to deposit the sale proceeds in to the bank account. 26. The respondents contention was th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the interest of fair investigation / disciplinary proceedings, he may be suspended pending enquiry. In such event, he shall be paid subsistence allowance as per rules. (e). When the person does not admit the charges or the Management is not satisfied with the explanation offered by the person and the charges are sufficiently grave and serious to warrant a punishment other than censure, reprimand or warning, the Management shall conduct a domestic enquiry by any person of its choice. (f)...... (g). At the enquiry, the charge sheeted person will be given the fullest opportunity to cross examine the witnesses, examined on behalf of the Management and also examine witnesses, if any, on his behalf. It shall be responsibility of the charged person to bring the witnesses he chooses to examine on his behalf to the enquiry. (h)...... (i)....... (j)....... (k)...... (l).Upon the conclusion of the enquiry, the Enquiry Officer will submit to the Management a report containing his findings after a careful examination of the proceedings of the enquiry. The report should be a self-contained speaking report. (m).The charge sheeted person will be furnished with a cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued in accordance with the said provision, as contended by the learned counsel for the respondents, nowhere either in the show cause notice or in the impugned order or in the counter affidavit, the respondents never ever stated about the applicability of Section 7(1A) r/w Rule 5(e). It would be apposite to mention Section 7(1A), which reads as follows:- 'Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act.' 34. By referring the above said Section, the respondents submitted that the petitioner refrained from performing to prevent the shortage of supply, so that they have imposed the penalty and as such it would attract the GST. This Court is not in a position to accept the present approach of the respondents due to the reason that the imposition of any GST will arise only when the penalty imposed in the course of trade or commerce. During the course of business, if any agreement was entered, where there is a delay in supply or in payment, if any, penalty imposed as per the agreement, such penalty comes under the purview of Section 7 (1A) for the imposition of GST. However, in the present case, the penalty imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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