Case Law Details
Salim Mohammad Vs Assistant Commissioner of Revenue (Calcutta High Court)
Introduction: The case of Salim Mohammad vs. Assistant Commissioner of Revenue is a pivotal legal matter that revolves around a penalty imposed under the Central Goods and Services Tax (GST) Act. The petitioner challenges a detention order and penalty imposed on them for alleged violations of GST regulations. This article provides an in-depth analysis of the case, highlighting the key contentions of both the petitioner and the revenue authorities.
Detailed Analysis:
1. Background of the Case: The petitioner was involved in transporting a consignment of old MS iron scrap weighing 30,580 kgs to M/s Uttam Steel & Agro. During this process, the vehicle carrying the consignment was parked at Bakra compound. It had not been fully loaded, and its journey to the destination had not yet commenced. The revenue authorities intercepted the vehicle at the parking lot and issued a detention order under Section 129(1) of the Central Goods and Services Tax Act, accompanied by a penalty of Rs.4,95,396.
2. Appeal and Dismissal: The petitioner appealed against the penalty order, but the appellate authority upheld the penalty. The primary grounds for upholding the penalty were that the vehicle was transporting goods without an e-way bill and tax invoice, which was seen as a contravention of GST regulations.
3. Key Contentions: The petitioner’s argument is centered around the timing of the interception and the generation of the e-way bill. They contend that since the vehicle had not yet started its journey and was still in the parking lot, the provisions of Sections 68 or 129 of the Act should not be applicable. The petitioner asserts that the e-way bill was generated immediately after the vehicle was intercepted, as there was no opportunity to generate it before loading, weighment, and transportation.
4. Revenue’s Stand: On behalf of the revenue authorities, it is argued that the vehicle was intercepted at a check post at Bhaktinagar, as indicated in Form GST-MOV –II issued on 6th March 2023. The e-way bill suggests that the vehicle had already commenced its movement from Manpari Basti. Additionally, concerns are raised regarding the date of issuance of the parking compound receipt, which appears to be earlier than the date when the vehicle left the parking compound. The revenue authorities contend that the receipt may have been procured subsequently to support the petitioner’s case.
5. Court’s Decision: The Calcutta High Court decided to remand the case to the appellate authority for reconsideration. The court emphasized the need for the authority to revisit the case, taking into account the arguments presented by both parties. Specifically, the appellate authority is directed to determine whether the vehicle was in motion at the time of interception, a crucial factor in applying the provisions under Sections 68 and 129 of the Act.
Conclusion: The Salim Mohammad vs. Assistant Commissioner of Revenue case underscores the importance of careful interpretation of tax laws and regulations. The Calcutta High Court’s decision to remand the case reflects the need for a thorough examination of the facts and circumstances surrounding GST penalty cases. The court’s directive ensures that the matter is reconsidered impartially, without influence from prior observations.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
Heard learned counsels for the parties.
At the outset, it is submitted on behalf of the Commissioner of Central Goods and Service Tax, Siliguri Commissionerate being the 4th respondent herein that since the vehicle was allegedly intercepted by the State Tax Officer of the Revenue and Investigation (North Bengal) Headquarters, the 4th respondent has no role to play herein.
On merits, it is submitted on behalf of the petitioner that in course of sending his consignment comprising old MS iron scrap weighing 30,580 kgs to M/s Uttam Steel & Agro the vehicle was parked in the parking lot at Bakra compound since it was not completely loaded and movement of the vehicle to its destination had not commenced. The vehicle was allegedly intercepted by the respondent authorities from the parking lot and a detention order was passed under Section 129(1) of the Central Goods and Services Tax Act in Form GST MOV 06 dated March 9, 2023. Penalty to the tune of Rs.4,95,396/- was slapped upon the petitioner for violation of Sections 68 and 129(1) of the Act. The order of penalty was carried in appeal by the petitioner and the appellate authority, by an order passed on 2nd June, 2023 dismissed the appeal primarily on the ground that the conveyance was found to be transporting goods without any e-way bill and tax invoice in contravention of Section 68 of the WBGST Act of 2017 corresponding to Section 68 of the CGST Act 2017 read with Rule 138 of the WBGST Rules, 2017.
Learned counsel for the petitioner submits that since the vehicle had not commenced transportation and was parked at the parking lot for further loading, the provisions of Sections 68 or 129 of the Act have no manner of application in the present case. Loading of vehicle was yet to be completed and the vehicle was partially loaded as the relevant date was a holiday followed by 7th March, 2023 which was Holi celebrated throughout the State. The e-way bill demonstrates that the same was generated on 6th March, 2023 at 4.14 p.m., that is, after 27 minutes of the alleged interception of the vehicle. Learned counsel explains that the e-way bill was generated immediately after the vehicle was intercepted since there was no occasion for generating the same prior to completion of loading of the vehicle and its weighment and transportation.
Per contra, learned counsel for the State respondents submits that Form GST-MOV –II issued on 6th March, 2023 indicates that the vehicle was intercepted at the check post at Bhaktinagar and the e-way bill suggests that it had commenced movement from Manpari Basti, meaning thereby that vehicle was in movement when it was intercepted. Also, the receipt issued by Bakra compound parking indicates that though the vehicle left parking compound at 4.30 p.m. on 6th March, 2023 the receipt was issued on 5th March, 2023. So the said receipt was subsequently procured by the petitioner to substantiate his case.
Some of these issues have been raised by the authorities in the writ petition for the first time and were not dealt with by the appellate authority in considering the submission made on behalf of the parties in appeal.
In view of the above, this Court is inclined to hold that the matter be remanded to the appellate authority for revisiting the same upon consideration of the submission which may be made on behalf of both the parties before the authority. The appellate authority shall arrive at a decision as to whether the vehicle in question was in movement at the time of alleged interception of the same, thereby attracting the provisions laid down under Sections 68 and 129 of the Act of 2017.
Accordingly, the writ petition is disposed directing the 2nd respondent to reconsider the appeal upon affording reasonable opportunity of hearing to all the interested persons including the petitioner and pass a reasoned and speaking order thereto within four weeks from the date of communication of this order, in accordance with law. The parties shall be at liberty to place relevant documents before the concerned authority at the time of hearing.
It is made clear that this Court has not gone into the merits of the case and the appellate authority shall be at liberty to deal with the appeal independently without being influenced by any observation which may have been made in this order.
There shall be no order as to costs.
Since no affidavit has been invited, allegations contained in the writ petition shall be deemed not to have been admitted.
Urgent certified website copy of the order, if applied for, be given to the parties on compliance of requisite formalities.
