Case Law Details
DRB Infrastructure Pvt Ltd Vs State of West Bengal (Calcutta High Court)
In a noteworthy legal battle, the Hon’ble Kolkata High Court at Jalpaiguri has ruled in favor of DRB Infrastructure Pvt Ltd in their dispute against the State of West Bengal. The court’s decision revolves around the release of machinery and the petitioner’s challenge to the legality of its seizure.
Background of the case: DRB Infrastructure Pvt Ltd, a contractor, was awarded a construction project for a section of the highway in Jammu and Kashmir. During the transportation of their used machinery from Arunachal Pradesh to Jammu and Kashmir via West Bengal, their equipment was intercepted by the authorities. An order referred to as MOV-9 was issued, imposing a penalty due to the alleged absence of an invoice or delivery challan.
Petitioner’s Argument : DRB Infrastructure Pvt Ltd vehemently challenged the penalty order, contending that as there was no “supply” involved, no tax should be applicable. Consequently, the absence of tax should negate the need for an invoice and penalty. The petitioner emphasized that a consignment note and an E-way bill were provided as supporting evidence.
Revenue’s Contention : The Revenue, however, put forth a different perspective. They argued that an alternate remedy of appeal was available to the petitioner and, therefore, the petition should be dismissed outright.
Court’s Decision: After careful consideration of the arguments presented, the Hon’ble Kolkata High Court at Jalpaiguri ruled in favor of DRB Infrastructure Pvt Ltd. The court allowed the release of the machinery on the condition of furnishing a bank guarantee. Additionally, the Revenue was directed to file an affidavit-in-reply. The court further highlighted that the petition could not be disposed of since the petitioner was challenging the legality of the seizure itself.
Argued by Adv. Bharat Raichandani i/b UBR Legal.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
Counsel for the respective parties are present.
The petitioner has filed present writ application praying for direction for release of the trailers loaded with machines/equipment sent by E-way bill dated 22.12.2022 transported from Arunachal Project site to the project site of Jammu and Kashmir through the State of West Bengal.
The petitioner is a construction company who was entrusted with the sub-contract for earth excavation, embankment/subgrade work and drain work on the four/six lane access controlled expressway at Jammu in the State of Jammu Kashmir. In order to carry out the said work, the petitioner transported its own machinery from Arunachal Pradesh to jammu by two trailers through a third party consignment. On 26.12.2022, the respondent no.3 had intercepted the said trailers. By an order dated 15.02.2023, the respondent no. 3 has imposed penalty upon the petitioner for a total amout of Rs. 8,13,600/- for violation of the provisions of Section 31, 68 and Section 129(1) of the WBGST/CGST Act 2017 and Rules 45 and 55 of the WBGST/CGST Rules 2017.
Counsel for the petitioner submits that the petitioner has made representation for release of the trailers as the machinery are used machinery and for the purpose of carrying out the work awarded to the petitioner as sub-contract, the petitioner was transporting the same from Arunachan Pradesh to Jammu Kashmir through West Bengal but the authorities have not released the same and have imposed penalty and accordingly, the petitioner has filed the present writ application.
Counsel for the petitioner submits that since the machinery has been seized and lying with the respondent no.3, the petitioner’s work has been hampered and the petitioner is not in a position to carry out the work awarded to the petitioner at Jammu and Kashmir and accordingly, the counsel for the petitioner prays for release of the seized machinery so that the petitioner can take the said machinery for completion and execution of the awarded work.
Per contra, counsel for the State submits that the petitioner has filed this application with respect of release of machinery seized by the respondent no.3 in violation of the provision as mentioned above and if the petitioner is ready and willing to submit bank guarantee with respect of penalty imposed by the respondent no.3 by the order dated 15.02.2023, an order can be passed for release of the said machinery on interim basis till the disposal of the proceeding before the competent authority.
Considered the rival submission of the respective parties. Perused the materials on record and the impugned order.
The petitioner has also challenged the order passed by the respondent no.3 dated 15.02.2023 and as such this Court is of the view that the writ petition can only be disposed of only after exchange of affidavits and accordingly, the respondents are directed to file affidavit-in-opposition within three weeks; reply thereto, if any, be filed within two weeks thereafter.
In the meantime, the respondent no.3 is directed to release the trailers loaded with machinery and equipment on furnishing of Bank Guarantee equal to the amount as per the order dated 15.02.2023. The Bank Guarantee shall be valid initially for a period of six months and the same can be extended from time to time. The respondent no.3 is directed to release the said machinery within a week on receipt of the Bank Guarantee from the petitioner.
Let the matter appear before the next Circuit Bench.
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