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2020-TIOL-1929-HC-KERALA-GST
Gokul PG Vs State Of Kerala
GST - Petitioners are the owner of the goods consigned from Kanyakumari in Tamil Nadu to Kalyan in Maharashtra, as well as the owner of the vehicle in which the said goods were being transported - The goods, covered by an invoice as well as an e-way bill that showed the payment of tax [IGST], and the vehicle, during the course of transit through the State of Kerala, were detained by the respondents at Vattolipady near Perumbavoor - The detention, however, was for the reason that the vehicle was apprehended at a place that was not on the normal route between Kanyakumari and Maharashtra - Respondents passed an order for physical verification in FORM GST MOV-2 and immediately on receipt of the same, the petitioner approached this Court challenging the detention of the goods and the vehicle - The respondents had, in the meanwhile, collected material in the form of information from the Tax authorities in Kanyakumari and the Motor Vehicle authorities in Kerala to suggest that the consignment in question did not originate from Kanyakumari - Based on the information available with them, that suggested that the goods had actually been loaded in the vehicle only from Nellikuzhi in Kerala, the respondents invoked the provisions of Section 130 of the GST Act, to issue a notice in FORM GST MOV-10 to the petitioners - Respondents passed orders in FORM GST MOV-11, confiscating the goods and the vehicle, confirming a tax and penalty on the goods, and permitting a redemption of the goods and vehicle on payment of redemption fine - At this stage the petitioner amended his writ petition and the issue that is now raised before this Court is as regards the legality of the confiscation orders passed under Section 130 of GST Act.
Held:
+ In the instant case, while the material collected by the respondents, no doubt justify the detention of the goods and the vehicle, inasmuch as there was evidence to suggest that the transportation did not originate from Tamil Nadu, as was declared in the invoice/e-way bill that accompanied the transportation of the goods, and therefore, the said documents could be seen as invalid documents for the purposes of transportation of the goods, the respondents have not been able to establish an intention to evade tax which is a necessary pre-condition for invoking the provisions of Section 130 of the GST Act.
+ While in the instant cases, the detention under Section 129 can be said to be justified, the further invocation of Section 130, in the absence of any material to suggest that there was an evasion of tax by the petitioners, cannot be said to be justified.
+ It has to be noticed that the invoice raised by the petitioners admitted their liability to IGST, and while there is a presumption in favour of the petitioners with regard to tax compliance, there is no material produced by the respondents to rebut the said presumption that flows from the declaration in the invoice raised by the petitioners.
+ That apart, even assuming that the goods in question were procured from Nellikuzhi, as suggested by the respondents, so long as the destination shown in the invoice and the e-way bill was Kalyan in the State of Maharashtra, the tax liability would have to be under the IGST Act, and the said tax liability was already declared by the petitioners in the tax invoice that was raised by them.
+ Thus, the material available with the Department as of now, does not point to any intention to evade payment of tax on the part of the petitioners herein.
+ The necessary ingredient of mens rea not having been established in these cases, Bench is of the view that the invocation of the provisions of Section 130 against the petitioners was not justified, more so when, the petitioners were not confronted with any material in the possession of the respondents that suggested an intention to evade payment of tax.
+ As a matter of fact, in the notices served on the petitioners under Section 130 of the GST Act, there is no mention of any material that would point to a possible intention to evade payment of tax by the petitioners, and hence there could not have been an order confirming the proposed confiscation in terms of Section 130 of the GST Act.
+ While it may be true that the invocation of Section 130 of the GST Act in these cases was not justified, the irregularity in the documents that accompanied the transportation surely make it out to be a case that justified a detention of the goods under Section 129 of the GST Act.
+ In proceedings under Section 129 of the GST Act, there is no requirement for establishing mens rea, and hence, merely on detecting an irregularity in the documents that are to accompany the transportation of goods, the respondents would be justified in detaining the goods and passing the necessary order under Section 129(3) of the GST Act.
+ No doubt, in the instant cases, since the owner of the goods had approached this Court at the GST MOV-2 stage, the respondents did not get an opportunity to pass any order under Section 129(3), more so because, they had, in the intervening period, initiated proceedings under Section 130 of the GST Act. The proceedings under Section 130 having been found to be misconceived, Bench is of the view that the respondents must now be permitted to pass formal orders under Section 129(3), in respect of the detention that is found to be justified on the facts and circumstances of these cases.
+ Impugned orders passed against the petitioners under Section 130 of the GST Act in FORM GST MOV-11 are quashed and respondents are directed to pass orders based on the material available with them, and the statements taken from the petitioners under Section 129(3) of the GST Act.
+ The petitioners are permitted to obtain a release of the goods and the vehicle on payment of the tax amount in cash and furnishing a bank guarantee for the penalty amounts confirmed against them. On the respondents passing the order under Section 129(3) of the GST Act, they will be free to invoke the bank guarantee for realisation of the penalty amounts.
- Petitions allowed: KERALA HIGH COURT
2020-TIOL-70-NAA-GST
Director-General Of Anti-Profiteering Vs Pivotal Infrastructure Pvt Ltd
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Period July 2017 to December 2018 - Applicants allege profiteering by the respondent in respect of the purchase of flats in the respondent's project ‘Paradise' located in Gurgaon - Applicants allege that the respondent had not passed on the benefit of Input tax Credit availed by him by way of commensurate reduction in the price of the above flats - DGAP has determined that the profiteered amount is Rs.1,95,86,429/- and the respondent had also realised additional amount of Rs.25,282/- from each of the applicants - DGAP has confirmed that the respondent has passed on the benefit of Rs.2,06,88,394/- to his buyers on account of ITC during the month of March 2019 and August 2019 - respondent is directed to pass on interest @18% to the flat buyers - since the respondent has committed an offence u/s 171(3A) of the Act, they are liable for imposition of penalty u/s 171(3A) of the Act and accordingly a SCN is required to be issued - compliance report is to be submitted by the Commissioner CGST/SGST concerned within a period of four months - Present order is being passed in terms of rule 129(6) read with notification 65/2020-CT: NAA
- Application disposed of: NAA
2020-TIOL-69-NAA-GST
Director General Of Anti-Profiteering Vs Gurukirpa Developers And Infrastructures Pvt Ltd
GST - Anti-Profiteering - A mount of profiteering in terms of Rule 133(1) of the CGST Rules, 2017 is determined by the Authority as Rs.38,29,753/- being the benefit of additional ITC that was available to the respondent - Respondent had refunded an amount of Rs. 30,73,671/- to the buyers of the flats and also passed on Rs.1,60,020/- to the Applicants suo-moto - However, as per the assessment made by the DGAP, the above ratio [of additional ITC to taxable turnover ] comes to 3.04% and hence he is required to refund the balance amount of Rs. 7,56,082/- (Rs. 38,29,753-Rs. 30,73,671) @ 3.04%-2.75%=0.29%) - Respondent has already refunded Rs.1,60,020/- to the Applicants and has further paid an amount of Rs.38102/- to them vide Cheque dated 14.12.2018 (Total Rs. 1,60,020+Rs. 38102=Rs. 1,98,122) - However, he had not paid interest @18% to the above Applicants from the date from which the above amount was profiteered by him - Therefore, the Respondent was directed to pay interest to the Applicants @18% and also directed to refund an amount of Rs. 7,17,979/- to the rest of the flat buyers along with interest - Authority had accordingly passed the order dated 28.03.2019 [2019-TIOL-21-NAA-GST] determining the profiteered amount and also held the respondent to have contravened the provisions of s.171(1) of the Act; accordingly, a notice dated 01.04.2019 was issued seeking imposition of penalty in terms of s.122 r/w rule 133(3)(d) of the Rules, 2017 - respondent has vide submission dated 04.04.2019 challenged the proposal for imposition of penalty on the primary ground that they had accepted and paid the amount which had been determined by the authority; that penalty can only be imposed when there is mens rea and deliberate attempt to violate the provisions of law and that they have complied with the order of the Authority.
Held: From the perusal of section 122(1)(i) of the Act, 2017, it is clear that violation of the provisions of s.171(1) is not covered under it as it does not provide penalty for not passing on the benefit of tax reduction and ITC hence penalty cannot be imposed under the said section - It is further revealed that vide section 112 of the Finance Act, 2019, specific penalty provisions have been added for violation of provisions of s.171(1) of the Act and which have come into force w.e.f 01.01.2020 by inserting s.171(3A) - Since no penalty provisions were in existence between the period 01.07.2017 to 31.08.2018 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed u/s 171(3A) cannot be imposed on the respondent retrospectively - accordingly, the notice dated 01.04.2019 issued is withdrawn and the proceedings initiated in this regard of penalty are dropped: NAA
- Proceedings dropped: NAA | |
