Case Law Details
Kolvekar Logistics Vs Joint Commissioner of Commercial Taxes (Appeals) (Karnataka High Court)
In a significant ruling, the Karnataka High Court in the case of Kolvekar Logistics Vs Joint Commissioner of Commercial Taxes (Appeals) clarified that transporters are not required to carry the original tax invoice while transporting goods. Instead, a duplicate copy suffices under the Central Goods and Services Tax (CGST) Act and State Goods and Services Tax (SGST) Act.
Background of the Case
Kolvekar Logistics, a partnership firm registered under the Goods and Services Tax Law, was transporting bitumen in heat-insulated containers. During transit, the vehicle was intercepted and inspected by the Enforcement Officer of the Commercial Tax department. The issue arose when the transporter could not produce the original tax invoice, only a Xerox copy, resulting in a penalty.
Legal Provisions and Arguments
The petitioner argued that neither the CGST Act nor the SGST Act mandates the carrying of the original tax invoice by the transporter. The relevant sections cited by the authorities were Rule 138-A of the SGST and Section 68 of the CGST, which do not explicitly state that the original tax invoice must be carried. According to Rule 48 of the CGST, invoices must be prepared in triplicate: one original for the recipient, a duplicate for the transporter, and a triplicate for the supplier.
Court’s Decision
The High Court reviewed the statutory provisions and previous judgments, particularly the case of M/S Divya Jyothi Petrochemicals Co. Vs. The Joint Commissioner of Commercial Taxes. The court concluded that the law requires the transporter to carry a duplicate copy of the invoice, not the original. Consequently, the penalties imposed for not carrying the original tax invoice were deemed unlawful.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner is seeking to issue the writ in the nature of certiorari to quash Annexure–D dated 01.10.2021 and Annexure-G dated 30.11.2021 passed by respondent Nos.1 and 2.
2. Heard learned counsel Sri. Narayan G. Rasalkar, for petitioner and Smt. Kirtilata R. Patil, learned High Court Government Pleader for respondents.
3. Learned counsel for the petitioner contended that the petitioner is the partnership firm carrying on its business and registered under Goods and Services Tax Law, petitioner was transporting bitumen for subsequent sale. It was shipped in a heat insulated containers in liquid state, ensuring conditioning of the temperature. When the container was transporting the consignment, the respondent-Enforcement-2 of Officer of the Commercial Tax intercepted and inspected the vehicle. It is stated that the Original Tax Invoice was not carried in the vehicle and therefore, the petitioner is liable for penalty. Accordingly, the Enforcement passed the dated 01.10.2021 determining the tax and penalty.
4. Learned counsel submitted that tax demanded by respondents was paid while preferring the appeal before the first appellate authority i.e. Assistant Commissioner of Commercial Tax. But the first appellate authority has passed the impugned order as per Annexure-D under Section 129(3) of the Central Goods and Services Act, 2017 (for short, ‘the CGST Act’) only on the ground that the original outward supply tax invoice as specified under Section 68 of the CGST is not tendered by the driver but only Xerox copy of the invoice is produced.
5. Learned counsel submitted that none of the provisions under State Goods and Services Tax Act, 2017 (for short, ‘the SGST Act’) and the CGST Act prescribe carrying of Original Tax Invoice with the transporter. Annexure-D refers to Rule 138-A of SGST, so also Section 68 of the CGST, but nowhere in these provisions, there is reference to Original Tax Invoice to be carried by the transporter.
6. Learned counsel submitted that every supplier is required to upload the Invoices in the official portal and officials attached to the respondents could have downloaded the said Invoice. As per Rule 48 of the CGST, the Invoice is required to be prepared in triplicate in case of supply of goods and copy marked as Original is meant for recipient or purchaser of the consignment and therefore, same will be directly sent to the purchaser. The duplicate copy is meant to be carried by the transporter and the third copy marked as triplicate is meant for supplier to be retained with him. This Rule makes it clear that it is only the duplicate copy which is to be carried by the transporter during transit. The only objection raised by the respondents is that the transporter was not carrying the Original Tax Invoice, which is not the requirement of law.
7. Learned counsel placed reliance on the decision of this Court in M/S Divya Jyothi Petrochemicals Co. Vs. The Joint Commissioner of Commercial Taxes1 and in view of the above, he prays for allowing the writ petition.
8. Per contra, learned High Court Government Pleader opposing the petition submitted that since the petitioner was not carrying the original tax invoice, tax and penalty was imposed and the same was confirmed by respondents by passing the order. There is no illegality in the said order and therefore, he prays for dismissal of the petition.
9. The only contention raised by respondents is that the transporter was not carrying the Original Tax Invoice while transporting the goods. Even though Rule 138-A of the SGST and Section 68 of the CGST, are referred to while passing Annexure-G, none of these provisions refer to carrying of the Original Tax Invoice by the transporter.
10. Learned counsel for the petitioner placed reliance on the decision of this Court in M/S Divya Jyothi Petrochemicals Co. (supra). In support of his contention that the petition is liable to be allowed. In M/S Divya Jyothi Petrochemicals Co. (supra), a similar contention was raised by the petitioner therein. The same was considered in the light of the Rule 138A of the SGST and Section 68 of the CGST and Rule 48 of the CGST and an opinion was formed that as per Rule 48(1)(b) of the CGST, it is only the duplicate copy which is meant for transporter and the triplicate copy is meant for supplier as per clause (c). It is therefore, held that the transporter is not required to carry the original tax invoice, but the law mandates him to carry the duplicate copy. I do not find any reason to form a different opinion. Under such circumstances, it is the contention taken by respondents that the petitioner is liable to pay tax and penalty, as the transporter had not carried the original tax invoice cannot be accepted. It is stated that petitioner is levied with the double tax as he is already paid tax as required to be paid and once again he was compelled to pay tax with penalty and therefore, the same is liable to be refunded. Accordingly, I proceed to pass the following:
ORDER
a) The writ petition is allowed.
b) The order as per dated 01.10.2021 and 30.11.2021 produced as per Annexure-D dated Annexure-G are quashed.
c) Respondents are directed to refund of the tax and the penalty, paid in excess to the petitioner, within three months from today.
Notes
1 W.P.No.100378/2022 D.D.28.02.2024
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