Libra International Limited VS Assistant Commissioner Of Commercial Taxes

The case revolves around a writ petition presented by the petitioner, represented by Sri Suyash Agarwal, against respondent no.1, represented by Sri C.B. Tripathi, regarding certain actions taken under the UPGST Act. The petitioner seeks several reliefs through the writ, primarily centered on quashing orders issued by the respondent and any associated penalties.

The crux of the matter lies in an incident where the petitioner’s goods and vehicle were intercepted on 11th February 2018. The interception was allegedly due to the transportation of goods without an E-Way Bill. Subsequently, a notice was issued under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017, specifying tax and penalty amounts payable. An order was then issued demanding payment of Rs. 1,01,844/- as tax along with an equivalent penalty amount, totaling Rs. 2,03,688/-.

In response, the petitioner filed the writ petition seeking relief from the aforementioned orders and penalties imposed. The petition raises questions regarding the legality and procedural correctness of the actions taken by the respondent under the UPGST Act. The petitioner contends that the interception and subsequent penalties were unjustified or improperly enforced.

The arguments put forward by both counsels are expected to focus on the interpretation and application of relevant provisions of the UPGST Act, procedural irregularities, and any mitigating circumstances surrounding the incident. Sri Suyash Agarwal, representing the petitioner, is likely to emphasize the alleged flaws in the actions taken by the respondent and the consequent adverse impact on the petitioner. On the other hand, Sri C.B. Tripathi, as the learned Special Counsel for respondent no.1, is anticipated to defend the legality and validity of the orders issued, highlighting compliance with statutory provisions and any justifications for the penalties imposed.

The outcome of the case hinges on the court’s assessment of the evidence presented, including the validity of the interception, compliance with procedural requirements, and the applicability of penalties under the UPGST Act. The court may consider precedents, legal arguments, and the specific circumstances of the case in rendering its decision on the relief sought by the petitioner.

The petitioner asserts that they have already deposited the tax and penalty amount through a demand draft dated 14th February 2018. Despite this, they received an order in FORM GST DRC-07 on 18th September 2020, detailing the tax and penalty demands under Section 129 of the Act, 2017. The petitioner, left with no alternative, has thus filed the current writ petition.

The counsel representing the petitioner argues that since the order dated 15th February 2018, passed under Section 129(3) of the Act, 2017, has reached finality, it cannot be challenged at this juncture. Additionally, they contend that the writ petition is time-barred and should not be entertained. Furthermore, it is claimed that as the petitioner asserts to have already paid the entire amount of interest and penalty through a demand draft dated 14th February 2020, pursuant to the provisions of sub-section (5) of Section 138 of the Act, 2017, all proceedings related to the notice under Section 129(3) are deemed concluded.

However, the learned counsel for the State respondent argues that if the petitioner has indeed deposited the tax and penalty amount determined by the order dated 15th February 2018 under Section 129(3) of the Act, 2017, they can apply for rectification of the order uploaded in FORM GST DRC-07, along with evidence of payment made in response to the tax and penalty demand.

After hearing arguments from both sides and reviewing the records, the court will deliberate on the issues raised. The court’s decision may involve examining whether the petitioner has complied with the tax and penalty demands, the validity of the order dated 15th February 2018, and the applicability of provisions under Section 138 of the Act, 2017. Additionally, the court may assess the timeliness of the writ petition and whether the petitioner has exhausted all available remedies before seeking judicial intervention.

Section 129 of the Act, 2017 outlines the provisions regarding the detention or seizure of goods and conveyances in case of contravention of the Act or rules made thereunder. Subsection (1) specifies that if any person transports or stores goods in transit in violation of the Act or its rules, the goods, conveyance used for transportation, and relevant documents can be detained or seized.

Subsection (3) of Section 129 deals with the procedure following the detention or seizure. It mandates the issuance of a notice specifying the tax and penalty payable. After this, an order for the payment of tax and penalty is passed.

A crucial provision, subsection (5) of Section 129, contains a deeming provision. It states that upon the payment of the amount referred to in subsection (1), all proceedings related to the notice specified in subsection (3) are considered concluded. This provision essentially provides a resolution mechanism upon payment, ensuring that the proceedings regarding the notice come to an end.

These provisions of Section 129 establish a framework for addressing violations of the Act concerning the transportation or storage of goods, ensuring proper enforcement through detention or seizure, followed by the assessment of tax and penalty, with a mechanism for resolution upon payment. The interpretation and application of these provisions will likely be central to the resolution of the dispute presented in the writ petition.

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