Case Law Details
Pioneer Polyleathers Limited Vs Assistant State Tax Officer (Kerala High Court)
Facts –Goods belonging to the Petitioner, a registered dealer, were detained u/s 129(3) and tax demanded of Rs.5,28,834/-. Petitioner paid the amount through the portal and obtained payment receipt but the State Tax officer refused to release the goods and he insists that the tax and penalty ought to have been paid through cash or demand draft. Therefore, the present petition is filed. Counsel for Revenue submitted that the amount must be apportioned between the Centre and state as the liability is under the head IGST. That it is not within the State’s purview to effect the apportionment and that if the Court could have before it the GST Network, the problem would be solved. Counsel for GST Network submitted that they are only an infrastructure provider and have no statutory role to play in apportionment of taxes between Centre and State.
Decision of the High Court –The Court observed that Government both at the Centre and in the State, have ushered in the GST Tax regime to ensure that everything is made online with minimum manual interventions. Yet strangely, the authorities still insist that the payment should be by physical means i.e. either in cash or through Demand Draft. Such insistence seems to be archaic and out of tune with the very spirit of the GST regime . In apportionment, there may be delays and difficulties, but the taxpayer cannot be made to suffer, on that count – applying the ratio of the judgment in Fashion Marbles and Granites Pvt. Ltd. 2018-TIOL-62-HC-KERALA-GST , the Assistant State Tax Officer is directed to release the goods and the vehicle forthwith.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
The petitioner, a registered dealer, suffered the detention of its goods, under Section 129(3) of the GST Act. The Assistant State Tax Officer issued the Ext.P2 notice, demanding the petitioner to pay GST amounting to Rs. 5,28,834/-.
2. The record reveals that the petitioner paid the amount through the portal, and obtained the Ext.P3 payment receipt. But the Assistant State Tax Officer refused to release the goods, for he insists that the petitioner ought to have paid the tax and penalty either through cash or through Demand Draft. Aggrieved, the petitioner has filed this writ petition.
3. Yesterday, the learned Government Pleader submitted, on instructions, that the amount must be apportioned between the Centre and the State, as the liability is under the head IGST. It is not within the State’s purview to effect that apportionment. Therefore, she suggested that if the Court could have before it the GST Network, it will solve the problem. Therefore, I suo motu added GST Network as the 2nd respondent and notified the Standing Counsel.
4. Today, the Standing Counsel has appeared and submitted that the GST Network is only an infrastructure provider. It has no statutory role to play in apportionment of the taxes between the State and the Centre.
In this backdrop, the petitioner’s counsel draws my attention to the Ext.P4 judgment, which is said to have attained finality. I reckon under identical circumstances, this Court, in the Ext.P4 judgment, that is Fashion Marble and Granite Company Pvt. Ltd. v. Assistant State Tax Officer and Others1, has held as follows:
“14. Under these circumstances, the Court declares that the 1st respondent’s insistence that the petitioner should pay the amount either in cash or through demand draft cannot be sustained. As is further evident from Ext.P7, the petitioner is a dealer registered under the CGST. Cumulatively viewed, the petitioner’s paying the penalty under Ext.P5 receipt to the portal of GST is eminently sustainable. Therefore, I direct that the 1st respondent authority, release the goods, after receiving Ext.P5 receipt. With these observations, the writ petition stands disposed of.”
5. Given the submissions advanced by the Standing Counsel for the GST Network, evidently it is only a service provider, having no role to pay in the apportionment. Further, the Government both at the Centre and in the State, have ushered in the GST Tax regime to ensure that everything is made online with minimum manual interventions. Yet strangely, the authorities still insist that the payment should be by physical means: either in cash or through Demand Draft. That insistence seems to be archaic and out of tune with the very spirit of the GST regime. In apportionment, there may be delays and difficulties, but the tax payer cannot be made to suffer, on that count.
6. Under these circumstances, applying the ratio of the judgment in Fashion Marbles and Granites Pvt. Ltd. v. Assistant State Tax Officer, I hold that the Assistant State Tax Officer shall release the goods and the vehicle forthwith.
The Writ Petition is disposed of accordingly.
