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TMI Blog2024 (6) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... these Bank Guarantees, these Petitions were listed for direction on 26th June 2024. To a query raised by the Court about the status of the Bank Guarantees as recorded in the order dated 18th January 2022 given to the State GST Authority Respondent Nos. 2 and 3, Mr. Patkar informed the Court that the Bank Guarantees had already expired and they did not renew the same, nor the State GST Authority informed Petitioner about renewal - It was the obligation of Petitioner to have continued to renew the Bank Guarantees till the disposal of these Petitions, since based on these Bank Guarantees, the goods were released. Respondent No. 3 is directed to conduct enquiry, fix the responsibility and take the action against the officers / staffs who were responsible for allowing the Bank Guarantees to have lapsed. At the same time, Petitioner was also not justified in not renewing the Bank Guarantees, and therefore taking a firm view of such an inaction, this Court deems if fit to impose cost of Rs. 15 Lakhs on Petitioner to be paid to the PM Cares Fund, within a period of four weeks from the date of uploading of this order and file affidavit of compliance. The Petitioner is not liable to pay GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s intercepted at Palghar in Maharashtra. On interception, it was found that the e-way bill did not accompany the vehicle in which the machinery was transported as mandated by Rule 138 A of the MGST Rules, 2017. However, Bill of Entry accompanying the vehicle contained all the details. 4. The State GST authority issued a notice under the MGST Act for imposition of penalty. Petitioner replied to the said show cause notice on 19th December 2020. On 22nd December 2020, the State GST authority passed the impugned order imposing penalty under Section 129 (1) of the MGST Act equivalent to tax applicable on the value of the machinery. The penalty imposed is as under :- Writ Petition No. Penalty u/s. 129 (1) (a) (Rs.) Penalty u/s. 129 (1)(b) (Rs.) 2611 of 2021 14,44,200/- 40,11,665/- 5900 of 2021 15,55,152/- 43,19,875/- 5899 of 2021 15,97,760/- 44,38,228/- It is on this backdrop that Petitioner has challenged the order passed levying penalty by filing the present petition. SUBMISSIONS OF PETITIONER:- 5. Mr. Patkar for Petitioner submits that at the time of import of machinery there is no Customs duty or IGST liability since goods are exempt under notification no. 16 of 2015 read with notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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; Section 9:- Levy and collection. 9.(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the Maharashtra Goods and Services Tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 9 of the MGST Act levies tax on all intra-State supplies of goods or services or both and such a tax shall be paid by the taxable person. Section 7 (1) (a) of the MGST Act defines supply to include all forms of supply of good or services or both such as sale, transfer, barter, exchange, license, etc made or agreed to be made for a consideration by a person in the course or furtherance or business. Admittedly Sections 7 (1) (b) and 7(1)(c) are not applicable and the transaction under consideration also does not fall within Schedule I, II and III to the Act. In the instant case, when petitioner imports machinery and after Customs clearance transports the said machinery to its own factory, it cannot be said that such a transportation would fall within the definition of the term supply as defined by Section 7. This is so because for a supply to fall under Section 7 there has to be more than one person or entity between whom the transaction of supply should take place. The illustrations given in Section 7 (1) (a) namely sale, transfer, barter, exchange, etc fortifies the requirement of existence of more than one person to fall within the expression supply , which is not satisfied in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sports the goods imported, after Customs clearance to his own factory premises then it is a non-taxable supply and would fall within the category of exempted goods since no tax as opined earlier is leviable under the Act. In such a scenario, the penalty under the second limb of Section 129 (1) (a) would be levied which is two per cent of value of goods or 25,000/- whichever is less. In all the three petitions before us, two per cent of the value of goods is more than Rs. 25,000/- and therefore, as per Section 129 (1) (a) the penalty which could be levied is Rs. 25,000/- because it is the lesser of the two amounts. 15. If the interpretation sought by the State GST Authority is accepted then second limb of Section 129 (1) (a) would become redundant which deals with penalty in case of exempted goods and therefore such an interpretation is to be rejected. Also second limb is special provision dealing with exempted goods and therefore in the case of petitioner second limb of Section 129 (1) (a) should be made applicable. 16. Section 129 (1) (b) is identical to Section 129 (1) (a) except that clause (a) would apply where the owner of the goods comes forward for payment of tax and penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who were responsible for allowing the Bank Guarantees to have lapsed. At the same time, Petitioner was also not justified in not renewing the Bank Guarantees, and therefore taking a firm view of such an inaction, this Court deems if fit to impose cost of Rs. 15 Lakhs (Rs. 5,00,000/- X 3) on Petitioner to be paid to the PM Cares Fund, within a period of four weeks from the date of uploading of this order and file affidavit of compliance. The account details are as under : Name of the Account : PM CARES Account Number : 60355358964, IFSC : MAHB0001160 Branch : UPSC New Delhi Respondent Nos. 2 and 3 would take proper measures to ensure that such a course of action is not repeated that could result in a huge loss of revenue to the State if the relief on basis of which the Bank Guarantees were given is ultimately found not entitled to Petitioner. 19. In view of above, following order is passed ; (a) The Petitioner is not liable to pay GST on movement of machinery from JNPT to its factory since same would not fall within the charging section. (b) The impugned order being Exhibit-A dated 15th December and corrigendum dated 22nd December 2020 is modified by holding that the Petitioner is l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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