Detention order is to be passed by the jurisdictional assessing officer

By POONAM GANDHI Goods and Services Tax Judiciary September 10, 2022

TaxGuru Citation: 2022 taxguru.in 4089
Case Name: Macmet Engineering Limited Vs Commissioner of Commercial Taxes (Madras High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Madras High Court

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Macmet Engineering Limited Vs Commissioner of Commercial Taxes (Madras High Court)

Held that if there is bona fide dispute, it is only the jurisdictional assessing officer to decide the issue and it is not by the Roving Squad Officers.

Facts-

Five vehicles were intercepted by the State Tax Officer (Int.) Roving Squad (Addl.), Madurai, on 02.08.2022 at 03.45 pm. at Madurai – Tirunelveli Bye-pass, near Thirumangalam, Madurai. The second respondent detained the vehicle under Section 68(3) of the CGST Act read with Section 129(1) of the CGST Act and Section 20 of the IGST Act read with Section 68(3) of the CGST Act. Following the same, show cause notice dated 04.08.2022 in Form MOV 07 issued on the allegation that the vehicles carried consignments under ‘Bill to – Ship to’ concept, but the drivers were not in possession of invoices to support transport to ‘Bill to’ address in Tamil Nadu. The notice also proposed to impose penalty under Section 129(1)(b) of the CGST Act.

The petitioner contended that the jurisdictional Tax Officer would be the right person to decide the mistake and to be found whether there is loss of revenue or evasion of duty. In view of the error committed by the State Tax Officer (Intelligence), the petitioner prays that the detention orders passed by the second respondent are liable to be quashed.

Conclusion-

Madras High Court in the case of Jeyyam Global Foods Pvt. Ltd. vs. Union of India has held that if there is bona fide dispute, it is only the jurisdictional assessing officer to decide the issue and it is not by the Roving Squad Officers.

Held that looking from any angle and considering the nature of contract business, the only mistake committed by M/s. Phoenix Conveyor Belt India Private Limited is that, in the invoice, instead of ITD Cementation India Limited, the petitioner’s name is mentioned, except the said mistake, all other particulars properly recorded and 14 vehicles already reached the destination, five vehicles are in detention and 15 vehicles are in transit. It is seen that the petitioner already uploaded the particulars in the G.S.T. Portal even before the detention. The petitioner to produce all the documents to the jurisdictional assessing officer, give his explanation and it is for the assessing officer to see whether the triangular transaction ‘Bill to’, ‘Ship to’ is complete and thereafter, process the same.

Accordingly, concluded that this Court quashes the impugned detention orders alone and directs the second respondent to forward all the documents to the concerned jurisdictional assessing officer, who shall take up the issue and decide the same after giving opportunity to the petitioner. To safeguard the revenue, the petitioner to execute a bond for the demand and penalty raised. The jurisdictional assessing officer to decide the case on its own merits and pass appropriate orders.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

The parties and the issue involved in all these writ petitions are one and the same and therefore, they are heard together and disposed of this by this common order.

2. The contention of the learned counsel for the petitioner is that the petitioner is engaged in the supply of bulk materials transporting/handling systems. The petitioner provides solutions for bulk materials transportation, like coal, limestone, cement, potash, flyash and sinter, using overland belt conveyors, pipe conveyors and in-plant conveyors. The petitioner is having registered office at Kolkata, West Bengal, and they are registered under the provisions of G.S.T. ITD Cementation India Private Limited was awarded an EPC Contract, dated 13.02.2018, by the Tamil Nadu Generation and Distribution Corporation Ltd. [TANGEDCO], for establishment of captive coal jetty with unloading facility and pipe conveyor system for their thermal project at Udangudi, Thoothukudi District. Subsequent to the same, ITD Cementation India Limited entered into a back to back EPC contract with the petitioner for supply of jetty and pipe conveyor system together with allied electrical, instrumentation and control works.

3. The petitioner Company was issued with the letter of indent by ITD Cementation India Limited. The petitioner opened a site office within the radius of 1.5 Kms. from the work site of TANGEDCO and obtained GST Registration No.33AABCO7599L1ZT, for the purpose of stock transferring of certain machineries, equipments and other materials required for execution of the contract from the premises of the petitioner at West Bengal. The site office of the petitioner is not involved in any supply of goods or services till date and thereby, filing Nil returns. Consequent to the letter of indent, the petitioner placed purchase order with M/s.Phoneix Conveyor Belt India Private Limited, West Bengal, for supply of steel cord pipe conveyor belts and splicing kits to be supplied to ITDC. As per the purchase order, the supplies to be made to the petitioner [billed in the name of the petitioner] and the goods to be dispatched to ITD Cementation India Ltd., C/o.TANGEDCO, at Udangudi. ITDC had he work site of TANGEDCO as additional place of their business in the GST registration certificate. The officials of the TANGEDCO approved for the supply of 9550 meters of pipe conveyor belts to be transported from the premises of Phoenix Conveyor Belt India Private Limited, West Bengal, to the work site in 34 reels and 34 reels of pipe conveyor belt were transported as 34 consignments. 14 consignments delivered and received at the work site of TANGEDCO, the additional premises of ITD Cementation India Limited. Since the transaction involved supply of materials by M/s.Phoenix Conveyor Belt India Private Limited to the petitioner and from the petitioner to ITDC, the transaction was structured under ‘Bill To – Ship To’ concept. When the goods were moving to the work site, the same was accompanied by invoice and e-way bill raised by M/s.Phoenix Conveyor Belt India Private Limited. The petitioner would also raise their invoice on ITD Cementation India Limited when the goods are in transit and the same would complete the transaction of supply from M/s.Phoenix Conveyor Belt India Private Limited to the petitioner and from the petitioner to ITD Cementation India Limited.

4. On 26.07.2022, the supplier, M/s.Phoenix Conveyor Belt India Private Limited raised five invoices on the petitioner for a slot of consignments to be dispatched. Each consignment was accompanied by invoice, consignment note and packing list, and e-way bill raised by M/s.Phoenix Conveyor Belt India Private Ltd., for delivery from West Bengal to Tamil Nadu. As per Rule 138-A of the CGST Rules, 2017, the person in-charge of conveyance shall carry the invoice or bill of supply or delivery challan and a copy of the e-way bill in physical form or the e-way bill number in electronic form or mapped to Radio Frequency Identification Device embedded on to the conveyance as notified by the Commissioner. The details of invoice number, ‘Bill to’ address and ship to address are as follows:-

W.P.(MD)No.19395/2022:-

Document Reference

Bill to Address

Ship to Address

Other details

Invoice No. 2220000509 dated 26.07.2022

M/s.Macmet Engineering Ltd., Macmet House, 10B, O.C.Ganguly Sarani, Kolkatta –700 020.

Macmet Engineering Ltd. C/o.TANGEDCO, 1 St Floor, Ponpalani Villa, Kurinji Nagar.

LOI of ITD, dated 28.02.2019, mentioned in the invoice.