Ram Prakash Chauhan Vs Commissioner of Delhi (Goods And Service Tax) & Anr (Delhi High Court)
The Hon’ble Delhi High Court in Ram Prakash Chauhan v. Commissioner of Delhi (Goods and Service Tax) & Anr. [W.P.(C) 6924/2022 dated January 19, 2023] set aside the order raising a demand of tax and penalty for release of the goods. Held that, neither the Show Cause Notice (“SCN”) nor the order of demand stated the reasons for imposing the tax liability as well as penalty. Further, the payment made by the Petitioner for release of the goods was not voluntary. Remanded the matter back and directed the Revenue Department to issue a fresh SCN and pass an appropriate order after affording a reasonable opportunity to the Petitioner to be heard.
Facts:
Ram Prakash Chauhan (“the Petitioner”) carries on the business of trading in steel/iron bars as a sole proprietor. The Petitioner had purchased a consignment of steel (“the goods”) from M/s Mahendra Steels and sold it to M/s S.K. Integrated Consultant (“the Recipient”) and the goods were transported directly to the Recipient through E-way bill dated October 19, 2020, containing all the details of the transport and clearly mentioning the Goods and Services Tax Identification Number (“GSTIN”) of the Petitioner. However, since the goods were sold to the Recipient, therefore, their address was written on the E-way bill.
During transit, the truck was intercepted by the GST Authorities (“the Respondent”) on October 19, 2020 and the truck along with the goods were detained on the grounds that prima facie, the documents were found defective vide Order dated October 23, 2020 (“the Detention Order”) and on the same date, an SCN under Section 129(3) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) was issued and an order of demand in Form GST MOV-09 was passed raising demand of INR 2,78,129 and penalty of equivalent amount (“the Demand Order”).
Subsequently, the Petitioner paid the tax liability and penalty for release of goods and thereafter, filed an appeal before the Appellate Authority challenging the demand of tax and penalty, which was dismissed vide Order dated December 31, 2021 (“the Impugned Order”) on the grounds that the order passed by the proper officer was legally justified and required no interference.
Being aggrieved this petition has been filed by the Petitioner.
Issue:
Whether the Petitioner is liable to pay tax and penalty under Section 129(3) of the CGST Act?
Held:
The Hon’ble Delhi High Court in W.P.(C) 6924/2022 held as under:
