received from GST department
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Case Title |
Mahavir Polyplast Pvt Ltd. Vs State of UP and 2 Ors |
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Court |
Uttar Pradesh High Court |
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Honorable Judges |
Justice Saumitra Dayal Singh |
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Citation |
2022 (8) GSTPanacea 160 HC Uttar Pradesh W.T.No. 57 & 56 of 2020 |
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Judgement Date |
06-August-2022 |
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Counsel for Petitioner |
Mr Nishant Mishra |
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Counsel for Respondents |
C.S.C |
The bench of Uttar Pradesh High Court of Justice Saumitra Dayal Singh has held that Exercise of un-jurisdictional power by the authorities and application of erroneous provisions of sections under the act is untenable.
FACTS OF THE CASE
The Petitioner is engaged in the business of manufacture of PVC pipes. In the present case petitioner’s godown adjacent to manufacturing unit were searched on 07.08.2018 by Special Investigation Branch of Commercial Tax Department , Agra (hereinafter referred to as SIB) and found discrepancy of shortage of physical stock as compared to stock recorded in stock registers, and a panchnama was drawn. On 08.08.2018 the petitioner through an application disputed allegation of shortage of stock and informed SIB of existence of another godown held by him having stock in it.
On 10.08.2018, AC (Mobile Squad), Unit-II Agra issued SCN on form GST MOV-07 with the description “Vahan Sankhiya UPGODOWN02”. Similarly AC (Mobile Squad), Unit-VIII Agra issued SCN on 14.08.2018 on form GST MOV-07 with the description “Vahan Sankhiya GODOWON02”. Both the authorities issued separate SCN u/s 129(3) to assesee with respect to same search and seizure operation. Pursuant to notices, seizure orders were passed. Tax and Penalty was demanded. Petitioner made an appeal to AC grade II (Appeal) – 2 against the order dated 16.08.2019 passed by AC (Mobile Squad), Unit-II Agra in appeal no GST-71/2018 which was dismissed on 26.11.2019, and, against another order dated 27.08.2019 passed by AC (Mobile Squad), Unit-VIII Agra in appeal no GST-74/2018, which also was dismissed on 22.11.2019.
Assessee made an appeal to Hon. Court against the orders dated 26.11.2019 and 22.11.2019.
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COURT HELD
Considering the facts as recorded, Hon. court noted negligence committed by two authorities of mobile squad of Commercial Taxes Department so as to invoking section 129(3) – demand on detained, seized goods and release of goods and conveyance in transit; instead of section 67 – power of inspection, search and seizure to determine tax liability u/s 73 to 75 of the Act. Power u/s 67 is not exercised in routine manner, but only under circumstances when there is reasonable belief regarding probable suppression or intention to evade tax. Hon. Court quashed both the orders dated 26.11.2019 and 22.11.2019 and ordered for refund of any amount, if collected, with interest @8%, subject to adjudication.
Hon. Court communicated order to the Commissioner, Commercial Tax, UP to look into erroneous action of the officers, call for explanation and take appropriate action commensurate to the misconduct and to take consequential and corrective action to avoid such occurrences in future.
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ANALYSIS OF THE JUDGEMENT
Exercise of un-jurisdictional power by the authorities and erroneous provisions of sections under the act is untenable.
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