Ascics Trading Company v/s The Assistant State Tax Officer

The petitioner’s counsel has brought to the attention of the court that following an interim order issued on September 28, 2017, the goods owned by the petitioner, along with the vehicle transporting these goods, were released upon presentation of the interim order before the respondent. The court has listened to arguments from both the petitioner’s counsel and the learned Special Government Pleader representing the respondents.

The petitioner’s counsel highlights that following an interim order dated 28.09.2017, both the goods owned by the petitioner and the vehicle transporting them were released upon presenting the interim order to the respondent. After considering arguments from both the petitioner’s counsel and the learned Special Government Pleader representing the respondents, attention was drawn to the authority of the State Government to detain goods due to alleged non-compliance with document requirements under the Integrated Goods and Services Tax (IGST) Act, as cited in the contested Ext.P5 notice.

The Government Pleader elaborated on the legal framework, particularly citing provisions from the IGST Act, Central Goods and Services Tax (CGST) Act, and State Goods and Services Tax (SGST) Act. Specific attention was given to Section 4 and Section 20 of the IGST Act, as well as Section 6 of the CGST Act, in conjunction with Rule 138 of the CGST Rules, as amended by notification No. 27/2017 – Central Tax. The discussion aimed to elucidate the scope of authority granted to the State Government regarding the detention of goods under the IGST Act and related regulations.

The petitioner’s counsel has brought to the attention of the court that following an interim order dated 28.09.2017, both the goods belonging to the petitioner and the vehicle transporting these goods were released upon presentation of said interim order before the respondent.

During the hearing, arguments were presented by both the petitioner’s counsel and the learned Special Government Pleader representing the respondents. The court posed a specific inquiry regarding the State Government’s authority to detain goods based on alleged non-compliance with document requirements under the Integrated Goods and Services Tax (IGST) Act, which formed the basis of the detention outlined in Ext.P5 notice contested in the writ petition.

In response, the Government Pleader guided the court through relevant sections of the IGST Act, Central Goods and Services Tax (CGST) Act, and State Goods and Services Tax (SGST) Act, particularly focusing on Section 4 and Section 20 of the IGST Act and Section 6 of the CGST Act in conjunction with Rule 138 of the CGST Rules, as amended by notification No. 27/2017 – Central Tax. The Pleader underscored that although the authority to prescribe accompanying documents for interstate trade lies with the Central Government, as of the present moment, no such documents have been officially notified.

Given this context, the court concluded that neither the State Legislature nor the State Government possesses the jurisdiction to enact laws or rules governing interstate movement of goods for trade purposes or tax levies. Consequently, the court determined that the detention outlined in Ext.P5, solely on the grounds of lack of prescribed documents under the IGST Act/CGST Act/CGST Rules during transportation, lacks legal validity.

Therefore, the court ruled in favor of the petitioner by confirming the interim order, thereby granting absolute relief in the writ petition.

Download PDF:

For Reference Visit:

Read Another Case Law:

GST Case Law