Stanship Logistics Pvt. Ltd. vs The Deputy Comm.of State Tax (Appeal)

Caught in a GST web? When a transportation company faced legal hurdles over a penalty they didn’t directly pay, the Bombay High Court made a game-changing decision. Discover who truly has the right to appeal under GST laws! GST Justice #CaseHighlights The petitioner is involved in the transportation of goods and is registered under the CGST Act. In September 2019, their customer, M/s. Blue Star Ltd., imported Split Air Conditioners. An E-Way Bill was generated for the transportation of these goods, which had to be updated due to a truck breakdown. However, the truck was intercepted by the Department, who claimed the E-way bill had expired and detained the goods, resulting in a penalty of Rs. 20,18,308/-. M/s. Blue Star Ltd. paid the penalty to secure the release of the goods. This amount was later deducted from the account of the petitioner by M/s. Blue Star Ltd. The petitioner attempted to appeal this order, but the Appellate Authority refused the appeal, stating that since M/s Blue Star Ltd. had made the payment, the petitioner could not file an appeal. The court found that the Appellate Authority’s refusal to accept the petitioner’s appeal was unjustified. The court stated that just because the payment was made by owner on behalf of the petitioner, it doesn’t mean that the petitioner, being the aggrieved party, cannot appeal. The court has directed Appellate Authority to accept and adjudicate the petitioner’s appeal without any objection related to time limitations. In my view when Tax has been deposited who has deposit the tax becomes irrelevant, appeal should be admitted.

Rule. Rule made returnable forthwith. Ms. Shruti Vyas, ‘B’ Panel Counsel waives service on behalf of the Respondent-State. By consent of the parties heard finally.

2. By this petition filed under Article 226 of the Constitution of India, the Petitioner has sought following substantive reliefs :-

“(a) Rule be issued;

(b) This Hon’ble Court be pleased to issue any writ or order or direction most particular in the nature of Writ of Mandamus or any other appropriate writ directing the Respondents to admit the Appeal filed by the Petitioner and hear them on the merits of the case and thereafter issue an order on merits in accordance with law;

(c) This Hon’ble Court be pleased to issue any writ or order or direction most particular in the nature of Writ of Certiorari to call for the records of the case and peruse the same and issue appropriate directions or any other appropriate writ directing the Respondents to admit the Appeal filed by the Petitioner and hear them on the merits of the case and thereafter issue an order on merits in accordance with law;

(d) any other writ or order or direction as this Hon’ble Court may deem fit and proper in the circumstances of the case and in the interest of justice.”

3. Brief facts in the present petition are as under :-

The Petitioner is engaged in the business of transportation of goods on behalf of various customers and are also registered under Goods and Service Tax Act (for short ‘CGST Act).

4. On 26th September 2019, the customer of the Petitioner, M/s. Blue Star Ltd. imported a consignment of Split Air Conditioners and filed Bill of Entry No. 5062946 for clearance of the said goods. On 9th October 2019, E-Way Bill via Truck No.MH 43 U 0973 and 4537 was generated for transportation of said goods. However, on 10th October 2019, the said E-Way Bill was updated with a new vehicle no.MH 46 H 3087 as one of the truck could not reach CF Station on time due to break down.

5. On 11th October 2019, Respondent no. 2 intercepted the truck at Bhiwandi and after conducting physical verification, passed an order of detention under Section 129(1) of the CGST Act with remark ‘validity of E-way bill expired.’

6. On 14th October 2019, a show cause notice was issued to the Petitioner under Section 129(1) of the CGST Act and the same was replied by the Petitioner on 22nd October 2019. On 23rd October 2019 Respondent No. 2 passed Order-in-Original against the Petitioner confirming demand of Rs. 10,09,154/- towards IGST Tax and imposed penalty of the same amount under Section 129 of the Act. M/s. Blue Star Ltd. deposited the said amount aggregating to Rs. 20,18,308/- to secure release of goods since they were affected by detention and the said amount was subsequently deducted from the account of the Petitioner by M/s. Blue

7. Being aggrieved by the aforesaid Order-in-Original, the Petitioner on 27th January, 2020 approached Respondent No. 1 to file an appeal challenging the order. However, Respondent No. 1 refused to take an appeal on record by making a note on the covering letter that payment of Rs. 20,18,308/- is made under Section 129(1) of the CGST Act by M/s. Blue Star Ltd., owner of the goods and the Petitioner being a transporter cannot file an appeal.

8. It is on this backdrop, the present petition is filed, seeking appropriate direction against the refusal of Respondent No. 1 to take appeal of the Petitioner on record.

9. Heard learned counsel for the Petitioner and the Respondents and with their assistance have perused the records of the case.

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