Case Law Details
The Status of Kerala Vs Mohammad Sheref (Kerala high court)
It has to be borne in mind that in the case of an interstate transaction the applicable statute is the IGST Act and the power of detention is exercised by virtue of the provisions of Section 20 of the IGST Act read with Section 129 of the CGST Act. There is no reference to the provisions of the SGST Act in Section 20 of the IGST Act, save for the mention in the 4th proviso to Section 20. In my view, the 4th proviso would be attracted only in a situation where, in respect of an interstate transaction, there is a liability to pay tax under the IGST Act that includes components of tax under the CGST and SGST Acts or where a penalty based on tax liability is attracted under both of the said enactments. In the case of an interstate transportation of exempted goods, the phrase used in Section 129 of the CGST Act that is mutatis mutandis made applicable to the IGST Act, is “payment of an amount equal to 5% of the value of goods or 25000 rupees whichever is less”. The legislature appears to have used the words “penalty” and “an amount” distinctively and hence they cannot be seen as amounting to the same thing. In my view, the word ‘amount’ has to be seen as referring to a civil liability that accrues to the owner of the goods or such other person at whose instance an interstate transportation of the goods contrary to the provisions of the CGST Act is occassioned. When so viewed, the inference is inescapable that the amount to be collected from a person who is found to have transported exempted goods contrary to the provisions of the IGST Act, can only be such amount as is found payable under the CGST Act since it is the provisions of that Act that are to be deemed as enacted under the IGST Act. In other words, there is no provision that requires one to treat the provisions of the SGST Act as forming part of the IGST Act.
The upshot of the above discussion is that the liability of a person, who is not the owner of the goods, and who has transported exempted goods in contravention of the IGST Act, can only be in an amount equal to 5% of the value of the goods or 25000 rupees whichever is less, as specified under the CGST Act. He cannot be further mulcted with a similar amount under the SGST Act since the provisions of tax and penalty under the SGST Act are not attracted to the inter-state transaction of exempted goods covered by the IGST Act. I, therefore, see no reason to review the judgment impugned in the Review Petition. The Review Petition fails and is accordingly dismissed
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
This Review Petition has been filed by the State seeking to review the judgment dated 02.11.2020 in W.P(C).No.23397 of 2020. By the said judgment, which considered the legality of the detention of a consignment of goods at Muthanga, Wynad, during the course of interstate transportation, this Court had, taking note of the fact that the consignment was not covered by a valid delivery chalan that was one of the prescribed documents for transportation of exempted goods, found that the detention was justified. It was, however, held that the petitioner would only have to pay the lessor of an amount equal to 5% of the value of the goods or Rs.25,000/-, in terms of Section 129 (1)(b) of the CGST Act for obtaining a release of the goods and the vehicle.
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