STATEMENT OF FACTS
1. M/s ———(hereinafter referred to as the ‘Noticee/Appellant’), is a———–, registered in the GST law vide Temporary Registration Number ———— with its Principal Place of Business–—————. Copy of the order of Temporary Registration in Form GST REG-12 is enclosed as Annexure–.
2. The Appellant is mainly engaged in the business——. The Appellant is registered in the state of ——–having GSTIN——–.
Transaction in dispute
3. In the instant case, the Noticee/Appellant imported —–from —–and the goods were cleared from ——Port, —–vide Bill of Entry No. ———dated———-. A copy of the bill of entry is enclosed as Annexure——-.
4. The imported goods were supplied by the Noticee/Appellant directly from —–Port, —-t to—–, the Noticee/Appellant raised a tax invoice bearing No. ——dated —–(hereinafter referred to as ‘Invoice’) vide which the said transfer of goods was taking place. All the essential information as prescribed under GST law was mentioned on the Invoice and the corresponding E-way Bill was generated on —–under the category “Bill from Dispatch from” for the transportation of goods from ——to—–. A copy of the invoice and the corresponding E-way Bill are collectively enclosed as Annexure——–.
Interception of vehicle by the —————.,
5. The goods-in-transit were intercepted by the———, ———-on———–, at around——-, (hereinafter referred to as the “—–/ Department”) at———, ———, wherein, the ——recorded the statement of driver/person-in-charge of the conveyance Mr. ———in Form GST MOV-01 dated——-. Copy of MOV-01 is enclosed herewith as Annexure—–.
6. Further, the Ld. ——intercepted the vehicle and ordered for physical verification/ inspection of the goods in accordance with provisions of Section 68(3) of the SGST Act, 2017 (hereinafter referred to as the “SGST Act”) read with Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”) by way of issuing Form GST MOV-2 dated—–. Copy of MOV-02 is enclosed herewith as Annexure—–.
7. Thereafter, physical verification/inspection of the subject goods was conducted on ——and pursuant to said verification a physical verification report was issued by the Proper Officer in Form GST MOV-04 dated ——- (copy enclosed as Annexure——). In the physical verification report, there was only mention of description of subject goods and apart from the description of such goods there was no discrepancy noticed in the said report. Further, the goods found in the conveyance were the same as it was mentioned on the invoice.
Issuance of Show Cause Notice in Form GST DRC-01 along with Form GST MOV-07 dated——–.
8. Consequently, the Noticee/Appellant was served with Show Cause Notice in Form GST DRC-01 along with Form GST MOV-07 dated ——-(hereinafter referred to as ‘impugned SCN’) in terms of the provisions of Section 129(3) of the SGST Act read with Rule 142 of SGST Rules, 2017 (hereinafter referred to as ‘SGST Rules’) wherein, a penalty of Rs. ——/- (i.e., equal to 200% of the tax liabilitydemand) was proposed u/s 129(1)(a) of the SGST Act. Copy of the impugned SCN is duly enclosed as Annexure-——.
9. Further, on receipt of the impugned SCN, the Noticee/Appellant, due to commercial reasons and to get it goods/vehicle released, promptly deposited the confirmed penalty amount of Rs. ——/- under protest through Form GST PMT-06 bearing CPIN No. ——-dated ——-(copy enclosed as Annexure—–1) and requested to release the subject goods along with the vehicle.
10. After the payment of penalty (under protest) by the Noticee/Appellant, the Department released the goods along with the vehicle by way of issuing Form GST MOV-05 dated —–(copy enclosed as Annexure—–)
Issuance of order in Form GST DRC-07 along with Form GST MOV-09 dated ———-
11. Consequently, the Noticee/Appellant was served with the Summary Order in Form GST DRC-07 along with Form GST MOV-09 even dated —–(hereinafter collectively referred to as ‘impugned order') in terms of the provisions of Section 129(3) of the SGST Act read with Rule 142(5) of the SGST Rule wherein, penalty of Rs. —–/- was confirmed. The copy of the impugned order is enclosed as Annexure—–.
12. The summary of the findings recorded by the Department in the impugned order are given below: –
| S. No. | Observations | Conclusion | Provisions Violated |
13. Being aggrieved and dissatisfied with the impugned Order, the Noticee/Appellant is filing this appeal on the following grounds which are urged without prejudice to each other:
SUMMARY OF GROUNDS OF APPEAL
| Sr. No. | Grounds | Page No. |
| A. | The impugned order is incorrect on facts as well as law. | |
| B. | No penalty can be imposed without providing an opportunity of hearing as the same is not in accordance with the due procedure mentioned under the provisions of Section 129(4) of the CGST Act. Hence, the impugned order has been passed in complete violation of the principles of the natural justice. | |
| C. | Place of Importation is not required to be separately registered under GST therefore no penalty can be levied under Section 129(4) of the CGST Act | |
| D. | No Penalty can be levied on the Noticee/Appellant when there was no intention to evade the payment of taxes. | |
| E. | The penalty amount paid by the Appellant under protest is liable to be refunded along with interest. | |
| F. | Request for additional grounds. | |
| G. | Opportunity of being heard should be provided. |
GROUNDS OF APPEAL
Note: The provisions of the CGST Act and SGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to same provisions under the SGST Act.
A. The order is incorrect.
A. 1. At the outset, the Noticee/Appellant submits that the impugned order is incorrect on law as well as on facts. The Noticee/Appellant submits that the findings against the Noticee/Appellant in the impugned order are incorrect on the basis of the following grounds which are independent and without prejudice to one another.
B. No penalty can be imposed without providing an opportunity of hearing as the same is not in accordance with the due procedure mentioned under the provisions of Section 129(4) of the CGST Act. Hence, the impugned order has been passed in complete violation of the principles of the natural justice.
B.1 It is submitted that Section 129(4) of the CGST Act mandates that no penalty can be imposed without providing an opportunity of hearing as under:
“129. Detention, seizure and release of goods and conveyances in transit
(3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1). ………………………………………..
……………………………………………….
(4) No penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard”
B.2 From the bare perusal of the above-mentioned provisions, it is clear that Section 129(4) of the CGST Act mandates to provide the opportunity of hearing to the assessee before imposing penalty. However, in the present case, the Ld. ——has passed the impugned order on the date of issuance/receipt of the impugned SCN itself i.e., on——-, without following the due procedure of law.
B.3 It is pertinent to mention here that the Ld. ——has issued the impugned summary Order on the date of issuance/receipt of impugned summary SCN itself i.e., on——–. Accordingly, the Noticee/Appellant has not been granted with a reasonable opportunity to make any written or verbal submission before passing of the impugned order. The said arguments of the Noticee/Appellant find force as the entire proceedings in the present case have taken place as follows:
| Form Number | Form Name | Date of issue |
| GST MOV-02 | Order for physical verification / inspection of the conveyance, Goods and documents | |
| GST MOV-04 | Physical verification report | |
| GST MOV-06 | Order of detention | |
| GST DRC-01/ MOV-07 | Impugned summary SCN | |
| GST DRC-07/ MOV-09 | Impugned summary order | |
| GST MOV-05 | Release order |
B.4 In the light of above, it is evident impugned order has been passed without following the due procedure of law and also the same is totally in violation of the principles of natural justice. Hence, the demand confirmed is not sustainable and is liable to be set aside. In support of its contention, Noticee/Appellant would like to rely upon the following case laws:
B.5 In the case of M/s. Sangam Wires Versus versus The State of Bihar cited in 2023 Taxo.online 483, the Hon’ble Patna High Court held that opportunity of personal hearing as per Section 129(4) of the CGST Act should be granted before passing any order Section 129(3) ibid. The relevant extract of the judgment is reproduced as below:
9. This Court would find that the notice issued under Section 129(1)(a) was nothing more than an empty formality as no time/opportunity has been allowed pursuant to the notice, and immediately, on the same date, penalty has been recorded under Section 129(3). The determination of penalty under Section 129(3) is, therefore, in contravention of the statutory requirement under Section 129 of the Act. The requisite compliance with principles of natural justice, inherent in Section 129(4) has thus been violated.
…Emphasis Supplied
B.6 Further, in the case of Sanchar Telesystems Limited Versus Commercial Tax Officer Vigilance-4 Bengaluru cited in 2020 Taxo.online 814,the Hon’ble Karnataka High Court held thus:
“15. The provisions of section 129(4) of the KGST Act mandates that no tax, interest or penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard. This stipulation that no tax or interest or penalty shall be determined unless the person concerned is given an opportunity of being heard incorporates the seminal principle of fair play which is inherent in the established principle that no person is to be condemned unheard. If the CTO intended to rely upon data maintained by a third party and shared by such third party pursuant to the communication made by him, the fair play makes it incumbent on the CTO to provide an opportunity to the petitioner to meet the data lest the petitioner is fastened with the liability to pay either the tax or interest or penalty on the basis of the data that, allegedly – and as is now alleged by the petitioner, is obtained behind its back to its detriment. The impugned orders when thus tested cannot be sustained and will have to be quashed with the proceedings in JCCT (VIG)/CTO(VIG)-40/SRS/INS-15/2018-19 and JCCT (VIG)/CTO (VIG)-40/SRS/INS-16/2018-19 restored to the CTO for fresh consideration with the necessary opportunity to the petitioner to meet all materials that could be relied against it. Therefore, the following:”
…Emphasis Supplied
B.7 In the case of M/s. Ami Enterprises Pvt. Ltd. Vs. Union of India cited in 2022 Taxo.online 815 the Hon’ble Jharkhand High Court noted that the proceedings have been initiated on the same date and concluded also on the same date. Though, learned counsel for the respondent has stated that the proceedings were expedited at the instance of the taxpayer on the same date, but there is nothing to substantiate such contention. Thus, held that adjudication order and the appellate order both suffer from procedural infirmities and lack of proper opportunity to the petitioner or the person transporting to defend himself.
B.8 Further, in the case of N. Tobacco Vs. State of Gujarat, cited in 2020 Taxo.online 779, the Hon’ble High Court of Gujarat has set aside the order of the Adjudicating Authority on the grounds of issuance of order in Form GST-MOV-11 on same day as issuance of Notice under Form GST-MOV-10 without grant of hearing to petitioner.
B.9 Further, in the case of M. Shanmugavelu Vs. State Tax Officer cited in 2021 Taxo.online 481, the Hon’ble Madras High Court held that the order passed without providing an opportunity of hearing as mentioned under the provisions of GST Law is in clear violation of such provisions. Relevant portion is reproduced below for your kind perusal:
“3. Be that as it may, the petitioner’s place of business was inspected by the enforcement wing officials on 10-9-2020. Based on the same, show cause notice was issued on 20-10-2020. The petitioner submitted his reply dated 24-12-2020. However, without granting an opportunity of personal hearing, the impugned orders were straightaway passed. This is on the face of it as violative of Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017.”
B.10 Further, in the case of Bharat Mint & Allied Chemicals Vs. Commr. of Commercial Tax, cited in 2022 Taxo.online 227, the Hon’ble Allahabad High Court held the order of the Adjudicating Authority passed under Section 74 of the CGST Act to be not sustainable and quashed on the grounds inter-alia, no opportunity of hearing as contemplated under Section 75(4) of the Act, 2017 was afforded to the petitioner.
B.11 Further, in the case of HLG Trading Vs. Union of India,cited in 2016 Taxo.online 8, the Hon’ble High Court of Punjab & Haryana has set aside the order of the adjudicating authority because no opportunity of hearing was afforded to the petitioner before passing the order.
B.12 Further, in the case of Alkem Laboratories Ltd. Vs. Union of India cited in 2021 Taxo.online 190, the Hon’ble Gujarat High Court held that the impugned order passed by the Department should be quashed on the ground that no opportunity of hearing was given.
B.13 Further, in the case of In Re: Castex Technologies Ltd., cited in 2021 Taxo.online 1395 (Commr. Appl. – GST – Raj.), the Ld. Commissioner Appeals (GST), Jaipur has set aside the order passed by the Deputy Commissioner, Central Goods & Service Tax Division-C, Alwar as the Appellant was not given a proper opportunity of being heard resulting into the violation of Principle of natural justice.
B.14 Thus, in view of the submissions made hereinabove and the case laws relied therein, it is evident that the impugned order has been passed in complete violation of the provisions of Section 129(4) of the CGST Act as well as in contravention of the principles of natural justice by way of not affording the reasonable opportunity to the Noticee/Appellant to make its submissions either written or verbal and therefore, the same is liable to be set-aside on this count itself.
C. Place of Importation is not required to be separately registered under GST under GST therefore no penalty can be levied under Section 129(4) of the CGST Act
1. In the impugned order, the Department has recorded a finding that the place of dispatch e., is neither a principal place of business nor an additional place of business of the Noticee/Appellant. The only registered business place of the Noticee/Appellant on the common portal is “ ” and therefore, the Noticee/Appellant has supplied goods from an undisclosed place of business.
2. It is submitted that Section 2(85) of the CGST Act defines ‘place of business’ in GST which is reproduced as under: –
“2(85) “place of business” includes—
-
- a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or
- a place where a taxable person maintains his books of account; or
- a place where a taxable person is engaged in business through an agent, by whatever name called”
3. In this regard, the Noticee/Appellant would like to submit that the dispatch address e.,
– is a place of importation from where the Noticee/appellant has imported goods from –
—-vide bill of entry no. ——dated——. This is not the regular office or any place of business of the Noticee/Appellant. Hence, the Noticee/Appellant did not apply for the registration of the same.
4. Section 22 of the CGST Act states that every supplier should be liable for registration under CGST Act in the state from which he makes a taxable supply of gods or services or The relevant extract of Section 22 is reproduced as under: –
“(1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:”
5. Further, it is submitted that various advance rulings have held that there is no requirement of separate registration or multiple registration at the place of import and the applicants may continue to do the transactions from the place of their registered office which is importing such goods. Therefore, the Noticee/Appellant has cleared goods from on the basis of bills/invoices issued by its office located in –.
6. In support of its contention, the Noticee/Appellant would like to rely upon the advance ruling of Karnataka in the case of M/s Pine Subsidiary Industry cited in 2021 Taxo.online 1396 – Authority for Advance Ruling, Karnataka] wherein it was held that separate GST registration is not required at the place of importation. The relevant extract is reproduced for your kind perusal: –
“1. The applicant can issue tax invoice with IGST to the customer outside Karnataka as per section 20 of the IGST Act 2017 read with section 31 of the CGST Act 2017 for the interstate transaction as provided under section 7(1) of the IGST Act 2017, when the goods are directly dispatched from the port of import with invoicing done from the registered place of business and a separate registration need not be obtained at the place of importation.
2. The applicant can do the transaction using Karnataka GSTIN. In case of issuance of e-way bill, the applicant can mention the GSTIN of Karnataka and the place of dispatch as Chennai sea port.”
7. Further, reliance is placed in the case of M/s Sonkamal Enterprises (P.) 2018 Taxo.online 643 Authority for Advance Ruling, Maharashtra] where it was held that the applicant importer do not have any separate GST Registration in West Bengal and charged IGST from its Mumbai head office to its customers, procedure to raise invoice from Mumbai Head Office for imports received at Haldia Port, Kolkata is correct and for this transaction, no separate registration in State of West Bengal is required.
8. Further, reliance is placed in the case of M/s Aarel Import Export (P.) Ltd cited in 2019 Taxo.online 951 – Authority for Advance Ruling Maharashtra] it has been held by the authority that the applicant company having its head office at Mumbai, wishes to import coal from Indonesia at Paradip Port in State of Odisha to sell the same directly from Paradip Port Warehouse (Ex- BOND) to customers in Odisha by raising bills from Mumbai office, then the applicant need not take separate registration in State of Odisha and further it can do transaction on Mumbai Head Office GSTIN.
9. Similar view has been taken by Gandhar Oil Refinery (India) Ltd cited in 2022 Taxo.online 870 – Authority for Advance Ruling Maharashtra] wherein it has been held that the applicant, who was engaged in trading activity of non-coking coal in various States and importing coal at various ports in India, was registered with GST department in all such places, it can do business from their Head Office/Registered Office at Mumbai under GSTIN of Maharashtra and need not take separate registration in other States.
10. Further, reliance is place in the judgement of M/S. Kardex India Storage Solution Private Limited cited in 2020 Taxo.online 1042– Authority for Advance Ruling, Karnataka] wherein it was held that the applicant need not obtain registration in the state where the port of clearance is located, if he is not making any supply from the State in which the port is located.
11. On perusal of definition of Place of Business in accordance with CGST Act 2017 and the pronouncement of various advance rulings, it can be concluded that since the importer has no establishment or place of operation or any godown or GSTIN at the port of import, thus the place from where he ordinarily carries on his business shall be deemed to be the place from where he makes the taxable supplies and thus, there shall be no requirement to take separate registration in the State of import. Therefore, the Noticee/appellant is not required to register the place of importation i.e., in GST registration.
D. No Penalty can be levied on the Noticee/Appellant when there was no intention to evade the payment of taxes.
1. Without prejudice to the above submissions, the Noticee/Appellant humbly submits that penalty under Section 129 can be levied only when there is an intention to evade payment of tax.
2. The Noticee/Appellant would humbly like to mention that the penalty cannot be levied unless there is a clear intention to defraud the Government or there was an intention to evade the payment of taxes. Section 129 and 130 of the SGST Act can be invoked only when the taxpayer tries to evade the tax. Intention to evade the payment of tax is the sine qua non condition for invoking Section 129(3) of the SGST Act.
3. Recently, the Hon’ble Allahabad High Court in the case of M/s. Shyam Sel and Power Limited Versus State of U.P. And 2 Others cited in 2023 Taxo.online 1018 Allahabad High Court] held that if there was no intention to evade the payment of tax by the taxpayer then the proceedings cannot be initiated under Section 129 or Section 130 of the CGST Act. The relevant paras of the judgment are reproduced thus:
“10. For invoking the proceeding under section 129(3) of the CGST Act, section 130 of the CGST Act was required to be read together, where the intent to evade payment of tax is mandatory, but while issuing notice or while passing the order of detention, seizure or demand of penalty, tax, no such intent of the petitioner was observed. Once the dealer has intimated the attending and mediating circumstances under which e-way bill of the purchasing dealer was cancelled, it was a minor breach. The authority could have initiated proceedings under section 122 of the CGST Act instead of proceedings under section 129 of the CGST Act. Section 129 of the CGST Act must be read with section 130 of the said Act, which mandate the intention to evade payment of tax. Once the authorities have not observed that there was intent to evade payment of tax, proceedings under section 129 of the CGST Act ought not to have been initiated, but it could be done under section 122 of the CGST Act in the facts & circumstances of the present case. It is also not in dispute that after release of the goods, the same were sold to P.L. Trading Company.
11. Section 129 of the CGST Act deals with detention, seizure and release of goods in case violation of the provisions of the CGST Act is found. Section 130 deals with confiscation of goods or conveyance and levy of penalty. Both the sections revolve around a similar issue and provide for the proceedings available at the hands of the proper Officer upon him having found the goods in violation of the provisions of the Act, Rule 138 of the Rules framed under the CGST Act being one of them. Upon a purposive reading of the sections, it would suffice to state that the legislation makes intent to evade tax a sine qua non for initiation of the proceedings under sections 129 and 130 of the CGST Act.”
…Emphasis Supplied
4. The Noticee/Appellant would further like to place on the judgment of the Apex Court in the case of M/s. Satyam Shivam Papers Pvt. Limited & Anr cited in 2022 Taxo.online 24 wherein while confirming the judgment of the Hon’ble Telangana High Court, the Apex Court held that once the intention to evade payment of tax is not found, penalty under Section 129 of the CGST cannot be levied.
5. The Noticee/Appellant would also like to place reliance in the case of M/s A.S. Enterprise Versus Commissioner of State Tax U.P. And 2 Others cited in 2022 Taxo.online 358– Allahabad High Court]. In the said judgment, the Hon’ble High Court observed as thus:
6. There is no dispute to the fact that the documents that were produced by the petitioner though at the stage of the show cause notice were original tax invoices issued by the petitioner. No enquiry was made to doubt the genuineness of such tax invoices or to doubt the date of issue of such Thus, all tax invoices produced by the petitioner to cover the disputed goods are dated 31.07.2021. No enquiry appears to have been made from the revenue authorities in the State of Punjab to confirm if the transactions were genuine. Then, it is not the case of the revenue that the goods found transported were different from the goods disclosed in the tax invoices produced by the petitioner. No enquiry was conducted by the respondent authorities either from the purchasing dealers or the Assessing Authority to doubt the transaction at the end of the consignee.
7. In view of the above lack of enquiry and lack of reasonable doubt, the continued seizure and confiscation as also the demand of tax and penalty is based solely on presumptions and conjectures. While the mistake claimed by the petitioner gave rise to the valid suspicion with the revenue authorities inside State of U.P. as to the genuineness of the transaction as an inter-state sale claimed (at that stage orally), however, upon furnishing of the original tax invoices at the stage of the show cause notice itself, initial onus that rested on the assessee was Thereafter, it was for the revenue authorities to conduct proper enquiry and or lead other evidence to establish that the tax invoice being set up by the petitioner were bogus or otherwise not referable to the transaction in question. Genuineness of the tax invoice once not doubted is prima facie primary evidence as to the genuineness of the transaction. The petitioner is a registered dealer. He has issued tax invoice after charging Integrated Goods and Services Tax. That evidence being undoubted, the seizure and confiscation and consequent demand of tax and penalty is based on no cogent material and evidence.
…Emphasis Supplied
6. In the present case, the Noticee/Appellant generated the e-way bill wherein the dispatch from address was –.Occasioned solely by that occurrence, goods were seized, and tax and penalty were demanded. However, the Department neither raised the question of the validity of the transaction nor did they allege any tax evasion in the present transaction.
7. Further, the Noticee/Appellant has generated the e-way bill under the outward supply category and also paid the entire amount of tax while filing its GST returns.
8. In the present case, there is a lack of enquiry on the part of the Officer where the genuineness of the transaction was not doubted but still hefty penalty has been imposed by the Officer on its own whims and fancies.
9. The Hon’ble Supreme Court in the case of Hindustan Steel Ltd. Vs. State of Orissa 1969 Taxo.online 1 and in the case of CIT Harsiddh Construction Pvt. Ltd. has held where a penalty should be imposed under a law for failure to perform a statutory obligation is a matter of discretion of authority, to be exercised judiciary and on consideration of all relevant circumstances.
10. Further, the Hon’ble Supreme Court in the case Tamil Nadu Housing Board v Collector of Central Excise, Madras reported in 1994 Taxo.online 2, held that, “When the law requires an intention to evade payment of duty then it is not mere failure to pay duty. It must be something That is, the Assessee must be aware that the duty was leviable, and it must deliberately avoid paying duty. It is made more stringent by use of the word ‘intent’. In other words, the Assessee must deliberately avoid payment of duty which is payable in accordance with law.
11. Further, in the case of Medha Servo Drives Private Limited & Anr 2022 Taxo.online 1179, the Hon’ble High Court held that in order to levy penalty under Section 129 of the CGST Act, mens rea has to be In case the authority fails to bring out any mens rea for evasion of tax by the taxpayer, penalty cannot be levied. Since, the First Appellate Authority failed to bring out any intention of fraud by the Petitioner, the Writ Petition was allowed and the order confirming the penalty was quashed.
12. In the present case, the Department has not brought out any fact on record which shows that the Noticee/Appellant had the intention to evade the payment of taxes or to defraud the Government by any means whatsoever.
13. Hence, the levy of the penalty in the present case is completely unwarranted and unacceptable. The case laws relied upon by the Noticee/Appellant as mentioned above are applicable to the facts of the present case, therefore, the impugned order should be quashed, and the consequential relief should be granted to the Noticee/ Appellant.
14. In light of the above facts and submissions, it is evident that in the instant case, there is no attempt on the part of the Noticee/Appellant to evade payment of tax and to cause loss the Government Exchequer and the due amount of tax has rightly been discharged by the Noticee/Appellant with regard to the transaction in question.
15. It is further submitted that the Hon’ble Courts/Appellate Authorities have invariably held that in the absence of intention to evade payment of tax proceedings under section 129 not sustainable. In this regard, reliance can be placed on the following case laws.
16. In the case of Daya Shankar Singh State of Madhya Pradesh – Daya shanker – 2022 Taxo.online 819, the Hon’ble High Court of Madya Pradesh has held as under:
“25. We find substantial force in the arguments of Learned Counsel for the petitioner that present case has similarity with that of the above cases decided by Telangana and Calcutta High Court. The respondents could not establish that there exist any element of evasion of tax, fraudulent intent or negligence on the part of the petitioner. In this backdrop, the impugned notice/order could not have been passed.”
17. Further, in the case of Hanuman Ganga Hydroprojects Pvt. Ltd. Vs. State Tax Authority Siliguri Circle – 2022 Taxo.online 670, the Hon’ble High Court of Calcutta has held as under:
“17. After going through the order of adjudicating as well as the order passed by the appellate authority, this Court finds that the aforesaid authorities have not returned any finding that there was any deliberate and wilful attempt on the part of the writ petitioner to evade payment of tax. In order to justify invocation of the power to impose penalty in terms of the said Act, it is necessary that such authority arrives at a definite finding that there was a deliberate and wilful attempt on the part of the assessee to evade tax or there is lack of bona fide.”
18. Further, in the case of Assistant Commissioner, State Tax, Durgapur Vs. Ashok Kumar Sureka, 2022 Taxo.online 523, the Hon’ble High Court of Calcutta has held as under:
“8. We need not go into the controversy as to whether there was a break down of the vehicle, etc. The case has to be approached by considering the bona fides of the transaction as to whether the case warrants detention of the goods and collection of tax and penalty. Admittedly, the first e-way bill dated 7th September, 2019 was valid upto 9th September, 2019. Therefore, in the absence of second e-way bill, the tax authorities at Durgapur could not have intercepted or detained the vehicle. Therefore, the explanation offered by the respondent/writ petitioner was an acceptable explanation and a case cannot be made out that there was a deliberate and willful attempt on the part of the respondent/writ petitioner to evade payment of tax so as to justify invocation of the power under Section 129 of the Act.”
19. Further, in the case of M/s Global Panel Industries Private Limited Versus State of UP and others 2024 Taxo.online 203, the Hon’ble High Court of Allahabad has held as under:
“4. This Court in M/s Hindustan Herbal Cosmetics v. State of U.P. and Others (Writ Tax No.1400 of2019 decided on January 2, 2024) cited in 2024 Taxo.online 8 and M/s Falguni Steels vs State of U.P. and Others (Writ Tax No.146of 2023 decided on January 25, 2024) cited in 2024 Taxo.online 117 held that mens rea to evade tax is essential for imposition of penalty. The factual aspect in the present case did not indicate any intention whatsoever to evade tax. Furthermore, the documents that have been relied upon by the petitioner have not been considered by the authorities. The authorities have dealt with the issue with regard to the expiry of the E-Way Bill and held that no explanation was offered by the petitioner with regard to the fresh generation of the E-Way Bill, as the same had expired ten days before the detention. However, it is to be noted that the goods in the vehicle were for two e-Invoices and two E- Way Bills and only one E-Way Bill had expired. There is no dispute with regard to the consignor and consignee nor any dispute with regard to the description of the goods in the vehicle. In relation to the e-Invoices and the E-Way Bills, the authorities have not been able to indicate any intention whatsoever on behalf of the petitioner to evade tax. Indubitably, there is a technical violation that has been committed by the petitioner. However, the authorities have not been able to indicate in any manner that the E-Way Bill had been used repeatedly nor have they made out any case with regard to an intention to evade tax by the petitioner. Accordingly, this Court is of the view that such a technical violation by itself without any intention to evade tax cannot lead to imposition of penalty under Section 129(3) of the Act. This view is fortified by a catena of judgments as indicated above.”
21. In the light of submissions made hereinabove read with the case laws relied therein, the proceedings initiated against the Noticee/Appellant under Section 129 of the CGST Act are not sustainable. Hence, the impugned order is liable to be set aside.
E. The penalty amount paid by the Noticee/Appellant under protest is liable to be refunded along with interest.
1. It is submitted that in view of the detailed submissions made herein above, it is evident that the penalty imposed upon the Noticee/Appellant was not warranted at all. Hence, the penalty amount paid under protest to the tune of Rs /- is liable to be refunded to the Noticee/Appellant along with applicable amount of interest in terms of Notification No. 13/2017- Central Tax dated 28.06.2017.
2. In support of its contention, the Noticee/Appellant would like to rely upon the case of M/s Neva Plantation Private Limited ACST&E-Cum-Proper Officer North Enforcement Zone, Palampur, 2020 Taxo.online 1043 the Ld. Appellate Authority, GST, Himanchal Pradesh has held as under:
“22. In the view of the above facts, the instant appeal is accented and the order passed by Assistant Commissioner State Taxes & Excise-cum-Proper Officer, North Enforcement Zone Palampur dated 27.11.2018 is set aside. The tax and penalty deposited by the appellant under section 129(1) may be refunded and a penalty of Rs. Ten Thousand only (Rs 10,000/-) is imposed on the taxpayer under section 122(1) of the Act. The judgment in this case was reserved on 04.01.2020 which is released today.”
F. Request for additional grounds.
1. It is submitted that the Noticee/Appellant craves leave to add, alter, omit to/from its defence at the time of personal hearing or any time before that as may be advised and should also be allowed to file any documents during the course of personal hearing.
2. It is further submitted that the Noticee/Appellant craves leave to refer and rely upon any case law/judgment, as and when produced.
G. Opportunity of being heard should be provided.
1. It is prayed that a hearing in person may be allowed to the Noticee/Appellant before any final decision is taken by your good self on the impugned order. Further Appellant would be pleased to provide any additional evidence as required by your good self during the course of person at hearing.
2. In view of the foregoing submissions, it is humbly prayed that the proceedings initiated against the Noticee/Appellant be dropped and notice under reply be vacated by your good
Noticee/APPELLANT
PRAYER
In view of the above discussion, it is humbly prayed that the Appellate Authority may be pleased to:
- Allow the Appeal of the Noticee/Appellant along with consequential relief, if any and
- Set aside the impugned Order dated ——–and allow the refund of penalty amount paid along with applicable interest; or
- Pass such other order or orders as may be deemed fit and proper in the facts and circumstances of the case.
Noticee/APPELLANT
