Petitioner | Shree Enterprises |
Respondent | CTO |
Decision by | Karnataka High Court |
Date of order or Judgement | 14-March-2019 |
Citation no. | 2019 (3) GSTPanacea 1 HC Karnataka |
Hon’ble Judge | Justice S.Sujatha |
Decision | In Favour of Assessee |
Consideration of the objections filed and pass a speaking order quantifying the tax and penalty and thereafter to release the goods subject to payment of tax and penalty or to confiscate the goods.
Consideration of Objection Filed-Facts of the Case
Consideration of Objection Filed-Petitioners have challenged the order of confiscation issued by the respondent under section 130(1), (2) and 122 (1)(ii) and (iv) of the Central Goods and Service Tax Act, 2017 (for short ‘CGST Act’) dated 29-1-2019 as illegal, seeking all consequential reliefs.
Argument Before Court
Consideration of Objection Filed-Petitioner’s Contention
Consideration of Objection Filed-The petitioners are claiming to be the consignee and transporter of the goods in question. It is the contention of the petitioners that the respondent has detained the goods and vehicle illegally for more than a month, in violation of the procedure prescribed by the Government of India through Circulars and confiscated the goods and vehicle without there being any order of confiscation or there being arrears of tax and penalty.
The petitioners submit that one M/s Manish Enterprises sold 230 bags of Areca nut consisting of 16,100 kgs to petitioner No. 1. The said transaction suffered IGST. Respondent intercepted the vehicle carrying the said goods on 4-12-2018 at 10.30 p.m. at Chennagiri near Tarala Balu Circle. Despite the driver, in-charge of the vehicle produced the tax invoices and e-way bill to the respondent, the respondent suspected the genuineness of the said documents and initiated an enquiry.
It is the grievance of the petitioners that the respondent came to an unilateral presumption that the consignor is indulging in issuing tax invoices fraudulently without causing any movement of goods in violation of section 122(1) of KGST Act which was unwarranted. Respondent passed a confiscation order after issuing the penalty notice without considering the objections filed by the petitioners and there being no penalty order passed.
Petitioners seek for setting aside the order impugned being ex-facie illegal.
Consideration of Objection Filed-Respondent’s Argument
Consideration of Objection Filed-Respondent submitted that contents of the impugned order indicates the quantification of the penalty and fine payable under section 130(1) or 130(2) of CGST Act. It is a bona fide mistake committed in quoting a wrong provision of law. Indeed the said penalty and fine quantified relates to the penalty liable to be paid by the petitioners under section 129 of CGST Act.
Reference is made to section 160 of CGST Act to contend that no assessment, re-assessment, adjudication, review, revision, appeal, rectification, notice, summons or other proceedings done in pursuance of any of the provisions of CGST Act shall be invalid or deemed to be invalid merely by reasons of any mistakes.
Any mistake committed in the order would not be invalid in terms of section 160 of the CGST Act.
It is also submitted that on enquiry, it was noticed that the consignor was indulged in bill trading activities. Issuing tax invoices without there being any supply of goods is an offence falling under section 122 (ii) of the CGST/KGST Act, 2017.
Construing the confiscation order as the penalty order, the writ petitions require to be dismissed.
Karnataka High Court Held
Consideration of Objection Filed-The Hon’ble High Court heard the learned counsel for the parties and perused the record.
According to us, the instant petition. under Article 226 of the Constitution, should not be entertained as recourse to an alternate remedy was taken by the petitioner, does not impress us, since the exercise of power under Section 83 of the Act, to begin with, was without jurisdiction.
The fact that an alternate remedy is available to a litigant is a self-imposed limitation on the Court; something which did not deter the Court, when notice was issued in the matter, in the first instance, perhaps, given the assertions made in the petition. The Court can, and should exercise its powers, under Article 226 of the Constitution, amongst others, in cases where the impugned action or order concerned is without jurisdiction.
In this case, one of the jurisdictional ingredients‟, which is missing, is that the petitioner is not a taxable person
It was not in dispute that notice under section 129(1)(b) was issued by authorities to which objections were filed by assessee. In such circumstances, it was incumbent on the part of authorities to consider the said objections and pass a speaking order quantifying the tax and penalty and thereafter to release the goods subject to payment of tax and penalty or to confiscate the goods.
It was well settled law that unless the tax and penalty are quantified, no confiscation order could be passed.
It was necessary to provide an opportunity to the owner of the goods or person in charge of the goods vehicle to make payment of tax and penalty subsequent to the objections filed, if any.
Respondent shall consider the objections/reply filed by the petitioners and pass appropriate orders in accordance with law in an expedite manner after quantifying the tax and penalty for the purpose of section 129 of the Act. On quantification of penalty, goods and coveyance shall be released to the petitioners subject to payment of the penalty quantified.
Thus, notice under section 129 was quashed.
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