K.P. SUGANDH LTD (CHHATTISGARH HIGH COURT) W.P.T. NOS. 36 AND 49 OF 2020 (DOJ 16.03.2020)
FACTS OF THE CASE
The petitioners herein are the manufacturers of ‘Pan Masala and Tobacco Products’. On 14-1- 2020, the petitioners dispatched goods both Pan Masala and Tobacco Products to its custome. While the goods were being transported, the petitioners had issued with a tax invoice as well as e-way bill generated and handed the same to the Incharge of the conveyance. The vehicle was intercepted by the officials of the respondents/Department and asked for the details of the consignment. The driver produced before the authorities the relevant invoice bill and also produced the e-way bill as was required under the Act to the authorities concerned. The respondent authorities seized the vehicle and the goods on the grounds of there being discrepancies in the valuation of the goods and thereafter detained the vehicle and the goods. Subsequently, a notice in FORM GST MOV-07 under section 129(3) of the CGST Act, 2017 was issued to the person In charge of the conveyance i.e. the driver. Without considering any of the contentions raised by the petitioners in the said reply to the notice, the respondents have passed the impugned order whereby they have assessed the tax payable on the goods as also the penalty applicable on the said assessment made for the purpose of releasing of the goods and the vehicle.
PETITIONER CONTENTION
The contention of the petitioners primarily is that when a transport vehicle is intercepted by the authorities of the respondents all that person In-charge of the conveyance is required to keep along with him is the documents as is required under section 68 of the CGST Act, 2017 and Rules 138 & 139 of the CGST Rule, 2017.
According to the counsel for the petitioners, discrepancies in the valuation of the goods is not a ground, which would be available for the Department for detaining and seizure of the vehicle and goods. According to the counsel for the petitioners, while intercepting the transport vehicle carrying goods all that Inspector has to verify is that whether the person Incharge of the conveyance has the invoice bill for the goods being transported and whether the driver also has the e-way bill.
RESPONDENT CONTENTION
The contention of the petitioners is that the impugned order under section 129 is one which is appealable under section 107, therefore the writ petition for this reason itself is not maintainable.
COURT OBSERVATION
When the vehicle was intercepted on 14-01-2020, the person In-charge of the conveyance was in fact carrying the requisite documents, which he was supposed to carry in the course of transportation of the goods. As regards the discrepancy found in the course of inspection, the only observation made by the authorities concerned is that the valuation does not seem to have been properly conducted. Merely because the manufacturer sells his products to its customer or dealer at a price lower than the MRP, as such cannot be a ground on which the product or the vehicle could be seized or detained. What is more relevant to take note of is the fact that the details in the invoice bill as well as in the e-way bill matched the products found in the vehicle at the time of inspection except for the price of sale. So far as the ground of an alternative remedy available to the petitioner as pleaded by the State Government is concerned, this Court is of the opinion that since the case of the petitioners at the outset itself was that the entire proceedings for detention of the vehicle and the seizure of the goods being in total contravention to the GST law, relegating the petitioners to avail the alternative remedy of appeal under section 107 would not be proper, legal and justified. More particularly when this Court also finds that the proceedings of detention and seizure of the goods and the vehicle by the respondents is without any authority of law.
COURT ORDER
This Court is of the opinion that under valuation of a good in the invoice cannot be a ground for detention of the goods and vehicle for a proceeding to be drawn under section 129 of the CGST Act, 2017 read with Rule 138 of the CGST Rule, 2017. In view of the aforesaid the order passed under section 129 and the order of demand of tax and penalty both being unsustainable deserves to be and is accordingly set-aside/quashed. The respondents are forthwith directed to release the goods belonging to the petitioners based on the invoice bill as well as the e-way bill. Quashment of the impugned order by itself would not preclude the State Authorities from initiating appropriate proceedings against the petitioners for the alleged act of under valuation of the goods as compared to the MRP on the product in accordance with law.
DISCLAIMER
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