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TMI Blog2023 (3) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... ty inspected a godown on 22nd February, 2022 where 12,840 kilograms of cumin seeds were found. The stock of the goods was assessed. The person in charge of the godown produced the tax invoice, consignment note and the e-way bill of the said goods - On scrutiny of the aforesaid documents it was found that the goods were in order but the corresponding e-way bill expired. The authority was of the opinion that as the goods did not reach the end point as mentioned in the e-way bill, the goods were in transit. According to the respondent authority, the goods ought to have been covered with valid e-way bills till the time of delivery to the recipient. Section 67(2) of the Act empowers the proper officer to confiscate goods, if secreted in any place, for evading payment of tax. The place may be searched and goods seized and the same shall be released on payment of applicable taxes. The proper officer, if has reasons to believe that the goods are stored in a warehouse or godown or any other place without paying tax or not paying requisite tax, may cause inspection, search and seizure. The provision relates to a particular place where inspection, search and seizure can be made - Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate forum are liable to be set aside and, are accordingly, set aside. The respondent authority is directed to refund the amount collected from the petitioner as penalty positively within four weeks from the date of communication of this order - Petition disposed off. - HON BLE JUSTICE AMRITA SINHA For the writ petitioner :- Mr. Sandip Choraria, Adv. Mr. Rajeev Parik , Adv. Ms. Esha Acharya, Adv. For the State :- Mr. Subir Kumar Saha, AGP Mr. Bikramaditya Ghosh, Adv. JUDGMENT AMRITA SINHA, J.:- The petitioner is aggrieved by the adjudicating order and the order passed by the appellate authority affirming the same by holding that the petitioner acted in contravention of Section 67(2) read with Section 129 of the State Goods and Services Tax Act, 2017 ( the Act for short). The goods of the petitioner were seized on 22nd February, 2022 at 2 pm. from a godown upon invoking the provision of Section 67(2) of the said Act. The order of seizure issued in Form GST INS-02 dated 22nd February, 2022 mentions that, on inspection of the goods under Section 67(1) of the Act and on scrutiny of the books of accounts, registers, documents/papers and goods found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late authority was of the further opinion that the RTP could have easily updated his e-way bill from his mobile app which was a trivial thing. The petitioner specifically contends that the initial seizure was made under Section 67(2) of the Act whereas the penalty has been imposed under Section 129 of the Act. The same is impermissible in law. Section 67 can be invoked in respect of goods stored in a warehouse or a godown which has escaped payment of tax or is likely to cause tax evasion. The same implies that the goods were in a static position inside a warehouse or a godown but not in transit. Section 129 can be invoked only in respect of goods and conveyances which are in transit. The goods could not have been kept in the godown and be held to be in transit at the same time. The authority not being sure of the provision under which the penalty may be imposed, erroneously invoked the aforesaid provision, solely with the view to impose penalty upon the petitioner. It has been contended that if the goods were inspected and seized in transit then provision of Section 68 ought to have been invoked and not Section 67, as has been done in the present case. Since Section 67 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of penalty under Section 129. Reliance has been placed on the judgment delivered by the Hon ble Supreme Court on 2nd March, 2023 in Civil Appeal Nos. 9597-9599 of 2011 in Union of India Ors. Vs. M/s. Magnum Steel Limited etc. and on an order dated 6th August, 2022 passed by the Hon ble Allahabad High Court in Writ Tax No. 57 of 2020 in Mahabir Polyplast Private Limited Vs. State of UP two Ors. Prayer has been made for setting aside the impugned orders and refund of the penalty amount collected contrary to law. The respondent authority opposes the prayer of the petitioner. It has been submitted that the authority invoked Section 67(1)(b) as it was found that the petitioner was keeping goods in the godown on the basis of an e-way bill which had expired and thereafter seized the goods from the said godown. It has been submitted that according to Section 67(7) of the Act, the authority may issue notice to show cause within a period of six months which can be further extended to another six months. In the instant case, the authority issued the order of seizure under Section 67(2) on 22nd February, 2022 at 2 pm and immediately at 4.30 pm. on the same date, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said goods. On scrutiny of the aforesaid documents it was found that the goods were in order but the corresponding e-way bill expired. The authority was of the opinion that as the goods did not reach the end point as mentioned in the e-way bill, the goods were in transit. According to the respondent authority, the goods ought to have been covered with valid e-way bills till the time of delivery to the recipient. For determination of the value of the seized goods for computation of tax and penalty, the transporter and the person in charge of the goods in the godown were directed to appear for hearing on 26th February, 2022 as to why penalty under Section 129 of the Act would not be imposed. A proposed order under Section 129(3) of the Act was prepared and served upon the transporter and the person in charge of the goods and penalty under Section 129(1)(a) was imposed. Thereafter, when the petitioner disclosed himself as the owner of the goods, the authority invoked the provision of Section 68 and imposed penalty under Section 129(1)(a) of the Act. From the order under Section 129(3) of the Act dated 28th February, 2022 it appears that though initially the authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authority was satisfied that the goods were not in transit. Admittedly, the goods were seized two days after expiry of the e-way bill on being offloaded and stored in a godown not mentioned in the e-way bill. The e-way bill is for the purpose of moving/transporting the goods from one place to the other. Law does not require a way bill to remain valid for such period the goods remain in the godown. The petitioner submits, with conviction, that the godown from where the goods were seized is the final destination and the goods were duly delivered to the recipient. The authority has not come up with a case that the goods ought not to have been offloaded and stored at the said godown but should have been transported to the place mentioned in the e-way bill. The appellate forum took note of the entire issue and recorded in the impugned order that, the RTP could have averted the proceedings had the transporter s godown been mentioned in the registration certificate as additional godown and the same was a trivial thing to be done on the part of the RTP. Despite the above finding, the authority erroneously opined that as the goods were yet to reach the final destination mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalize the RTP when the goods are seized from a godown. In Magnum Steel (supra) the Hon ble Supreme Court held that the person authorizing the search must express his satisfaction that the material is sufficient for conducting a search and a reasonable belief that some objective material exists on the official record to trigger searches. The report of the proper officer is an unsatisfactory one, not enough to initiate search in the godown. In Mahabir Polyplast (supra) the Court was of the opinion that provision of Section 129(3) of the Act would not be invoked to subject a godown premises to search and seizure operation. For invoking Section 67 of the Act existence of reasons to believe to subject the premises to search and seize goods is mandated. Here, the authority is vacillating between Section 67 and 68; whether the goods are in transit or in the godown. In the case at hand it does not appear that the authority acted in accordance with the appropriate legal provisions and instead penalised the petitioner in a mechanical manner without proper application of mind. In view of the above, the impugned order of the adjudicating authority and the appellate forum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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