New India Biz Chem Private Limited VS Assistant Commissioner Of State Tax

The petitioner has filed a petition under Article 226 of the Constitution of India directly against the orders issued by the Proper Authority and the first appellate authority, both acting under Section 129 of the Central Goods and Services Tax Act, 2017. This course of action has been pursued because the Goods and Services Tax (GST) Tribunal has not been established by the Central Government for the State of Uttar Pradesh. The petitioner argues that their statutory right to approach the Tribunal cannot be denied once the Act itself has been enforced. They draw attention to Sections 112(3) and 113(1) of the Act, which define the jurisdiction of the CGST Tribunal.

Sections 112(3) and 113(1) of the Act allow for examination of orders passed by the Appellate Authority or the Revisional Authority. The Commissioner has the authority to call for and examine the record of such orders and may direct subordinate officers to apply to the Appellate Tribunal for determination of specified points. The Appellate Tribunal, after hearing parties to the appeal, may pass orders confirming, modifying, or annulling the decision appealed against, or refer the case back for fresh adjudication.

The petitioner’s counsel argues that appeals before the Tribunal are not limited to questions of law; factual issues can also be examined. Therefore, the petitioner could have addressed factual matters before the Tribunal if given the opportunity. They urge the court to consider these provisions to protect the petitioner’s rights regarding the statutory remedy available before the Tribunal.

The incident prompting this petition involves the detention of a transport vehicle on January 9, 2020, by CGST authorities on the Yamuna Expressway while it was transporting a drilling machine. The vehicle’s driver presented an E-way bill indicating the machine was being transported from Maharashtra to Ghaziabad. However, no tax invoice or hard copy was found with the vehicle, leading to its detention and a notice issued under Section 129(3) of the Act.

In response to the notice, the petitioner explained that the E-way bill was mistakenly generated and provided a correct E-way bill indicating the machine was being sent for job work. Despite this explanation, the Assessing Authority concluded that taxes were not paid, imposing a penalty, which was upheld in appeal.

The petitioner seeks direction against the respondent no.1 to restore their registration under the Goods and Service Tax Act.

This petition has been initiated under Article 226 of the Constitution of India directly challenging the orders passed by the Proper Authority and the first appellate authority under Section 129 of the Central Goods and Services Tax (CGST) Act, 2017. This move comes as the GST Tribunal has yet to be constituted by the Central Government for the State of Uttar Pradesh. The petitioner argues that their statutory right to approach the Tribunal should not be negated once the Act is in force. Sections 112(3) and 113(1) of the Act define the jurisdiction of the CGST Tribunal, allowing for the examination of both legal and factual issues.

The case in question involves the detention of transport vehicle no. U.P. 70 A.T. 5360 by CGST authorities on January 9, 2020, on the Yamuna Expressway while transporting a drilling machine. The authorities detained the vehicle due to a violation of Rule 138 of the GST Rules as no tax invoice or chalan was found with the vehicle. In response to the notice issued under Section 129(3) of the Act, the petitioner explained that the E-way bill produced was generated mistakenly and provided an alternative E-way bill, stating that the machine was being sent for job work to M/s Sharda Equipment, Jharkhand.

The Assessing Authority, however, upheld the detention, citing unpaid taxes and imposed penalties. This decision was affirmed in appeal, leading the petitioner to approach the Court seeking the restoration of their GST registration.

Furthermore, the petitioner, a private limited company engaged in the manufacturing and selling of chemicals, had inadvertently applied for the cancellation of its GST registration due to the discontinuation of its business. The cancellation was processed on April 3, 2021, despite attempts by the petitioner to file an appeal online, which was hindered by the self-cancellation. Subsequently, the petitioner resorted to manual filing under Section 107 of the CGST Act on August 10, 2021.

In essence, the petitioner is challenging the cancellation of their GST registration and seeking relief under Article 226 of the Constitution to restore their registration and address the issues arising from the detention of their transport vehicle.

Download PDF:

For Reference Visit:

Read Another Case Law:

GST Case Law: