Commercial Steel Company Vs Assistant Commissioner of State Tax (Telangana High Court)
The petitioner, a registered dealer engaged in the business of iron and steel, purchased goods from JSW Steel Limited, Karnataka, under a tax invoice dated 11.12.2019 on which IGST at 18% amounting to ₹63,526 was levied. While the goods were being transported from Karnataka to Hyderabad with all requisite documents, the vehicle was detained at Jeedimetla on 12.12.2019, and a notice under Section 129(3) of the CGST Act, 2017 was issued alleging “wrong destination” and demanding Central Tax, State Tax, and penalty amounting to ₹4,16,447. The petitioner contended that payment was made due to pressure to secure release of the vehicle, that the consignment was covered by proper documents, that the authorities lacked jurisdiction to detain goods in transit during an inter-State sale, and that “wrong destination” was not a valid ground for detention or levy of tax and penalty. The petitioner also contended that penalty required willful and contumacious conduct and sought refund of the amount collected.
Read SC Judgmentin this case: HCs Should Not Entertain GST Writs When Statutory Appeal Exists: SC
The respondents submitted that there was no coercion, that a show-cause notice in Form MOV-07 had been issued with an opportunity to file objections, and that principles of natural justice had been followed. They contended that although the goods were transported from Karnataka, there was a possibility of local sale because the vehicle had crossed Balanagar, the destination mentioned in the invoice, and reached Jeedimetla. According to the respondents, this indicated that the goods might have been intended for sale in the local market to evade CGST and SGST, and the detention was therefore justified.
