Aqua Excel Vs State Tax Officer (Adjudication) (Madras High Court)
Conclusion: Where assessee was able to demonstrate that the transaction was included in the GSTR-1 Return as a zero-rated sale, the goods detained under Section 129(3) should be released provisionally.
Held: Assessee received an export order from M/s. Laxana PLC, Colombo, Sri Lanka, for Rs. 24,16,604/-. The goods were transported from Coimbatore to Tuticorin for export. During transit, the goods were intercepted and verified by authorities, resulting in a detention order due to assessee’s failure to generate an E-Invoice. A show-cause notice was issued under Section 129(3) of the CGST Act, proposing a 200% tax penalty. Assessee argued that the non-generation of the E-Invoice was due to a technical error and that E-Invoice was generated the following day, as the transaction was a Zero-Rated Sale meant for export. They contended that the delay was a procedural lapse, not an attempt at evasion, and therefore, the penalty was unjust. Assessee had challenged the detention order on the grounds that the goods were intended for export and thus qualified as a Zero-Rated Sale, making any tax or penalty without jurisdiction. It was held that assessee should submit a report a copy of the GSTR-1 before the appropriate respondent, inasmuch as GSTR-1 would reveal if the subject transaction was disclosed as a zero-rate sale, an export transaction once disclosed in Form GSTR-1, integrated taxes ought to be paid or must be exported under Board or Letter of Undertaking in accordance with Section 54 of the CGST Act. The bench concluded that In view of the above, the bench disposed of the petition, directing assessee to file an appeal before the appropriate appellate authority under Section 107 of the Central Goods and Services Tax Act, 2017, to challenge the detention order.
