Case Law Details
M/s. Caterpillar India Pvt Ltd Vs State Tax Officer (Madras High Court)
According to the respondents in all writ petitions, the confiscation of the goods is perfectly in order as the petitioners have, admittedly, transported the consignments without valid E-way bills, thus violating clause (iv) of Section 130(1) above being, a contravention of the Act/Rules with the intent to evade tax. There is, no doubt, a violation in the present case, but one that has no revenue (tax) implications, seeing as the petitioners have remitted the taxes upon the consignments in full, under protest and pending adjudication. The question of determination of tax, if any, is, of course, left open to the authorities, to be determined in accordance with law.
As far as the determination of penalty is concerned, it is the Assessing Officer / State Tax Officer who is the competent and proper person for such determination/quantification. However, a holistic reading of the statutory provisions and the Circular noted above, indicates to me that the Department does not paint all violations/transgressions with the same brush and makes a distinction between serious and substantive violations and those that are minor/procedural in nature. Though the petitioners have been issued notices in terms of Section 129 (4) of the Act calling upon them to appear for adjudication, they have not responded to the same. The petitioners are thus directed to appear before the first respondent on 06.03.2019 at the first instance, for commencement of proceedings for adjudication. The question of whether the movement of the consignments sans valid E-way bills constitutes a substantive error or a mere technical breach shall be considered by the Assessing Officer, having regard to the provisions of Sections 122, 125 and 126 of the Act as well all relevant Instructions and Circulars issued by the Board, including the Circular extracted above. Let the officer also bear in mind that E-way bills, though stale, had, in fact, accompanied the consignments. The assessees/petitioners have offered explanations in regard to the circumstances that caused the documents to expire and such explanations will be taken into consideration by the officer in determining the quantum of penalty to be levied.
As far as the consignments in the case of Caterpillar (W.P.Nos.5075, 5076, 5078, 5081, 5185 and 5189 of 2019) are concerned, while I am inclined to order their immediate release, the interests of the Department must remain protected. The penalty is quantified, for the moment, and solely for the purposes of this order, 100% of the tax. The goods shall be released forthwith, upon condition that Caterpillar furnish a Bank Guarantee(s) for a sum of Rs.3,84,30,193/- in favour of the detaining Authority prior to such release. Proceedings for adjudication shall be completed within a period of six weeks from the date of initial hearing, being 03.2019.
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