19.08.2022: Detention Proceedings Initiated And Concluded On The Same Date Not Sustainable – E-Way Bill – Jharkhand High Court

The Hon’ble High Court of Jharkhand vide its order dated 10.08.2022 in the matter of M/s AMI Enterprises Pvt. Ltd. Vs. Union of India & Ors. in W.P. (T) No. 2312 of 2022, set aside the order dated 20th September 2021 and the Appellate order dated 17th February, 2022 finding that both the orders suffer from procedural infirmities as the detention proceedings in the matter have been initiated and concluded on the same day, resulting in lack of proper opportunity to the petitioner to defend himself.

Facts: –

  • That the vehicle bearing no. JH05 AF 0361 was intercepted at 08:20 a.m. on 18th September, 2021 on the alleged violation of Section 129 of the CGST Act, 2017 read with Section 68, as the E-way Bill expired on 11.59 p.m. on 17th September, 2021.
  • The proceedings were initiated from the issuance of Form GST MOV – 06, and thereafter, show cause notice in Form GST MOV- 07 was issued and the adjudication order in Form GST MOV – 09 was passed on the same date i.e., 20th September, 2021.
  • The Petitioner against the said order filed an appeal and that too was dismissed vide order dated 17th February 2022 by the respondent authorities. However, the petitioner has deposited the entire tax with interest and got the vehicle released on 21st September, 2021.  Being aggrieved of the actions of the respondents the petitioner has moved the present Writ Petition.

Petitioner’s Submissions: –

  • It was submitted on the behalf of the petitioner that no proper opportunity of filing reply or hearing was provided to the petitioner and the whole proceedings were held ex-parte.
  • The Vehicle was seized under Section 129 (1) of the CGST Act, 2017 and there was no intention to evade tax. Moreover, the respondents have not alleged any intention to evade tax.
  • Further to support is contention that there is no intention to evade, reliance was placed on Assistant Commissioner (ST) & Ors. Vs. M/s. Satyam Shivam Paper Ltd. & another passed in Special Leave to Appeal (C) No(s). 21132 of 2021.
  • With the above, it was submitted that the whole liability of tax along with interest is not sustainable.

Respondents’ Submissions: –

  • It was submitted on the behalf of the respondents that Section 129 does not prescribe the requirement of an intention to evade tax for imposing tax, interest and penalty.
  • The proceedings were expedited on the request of the tax payer itself, therefore, the impugned order do not suffer from any legal infirmity.

Held: –

  • The Hon’ble Court after considering the submissions from the both sides, facts of the case and law applicable, found that from the perusal of the statements made in the counter affidavit indicate that the vehicle was intercepted on 18th September 2021 since the E-Way Bill expired on 17th September 2021, and no extension of the E-Way Bill was sought by the petitioner by moving an application under Rule 138 (10) of the CGST Rules. Further it was stated in the counter affidavit that on the request of the tax payer, the vehicle was released on payment of tax and interest, as they did not want to submit anything on the issue, thus, the case was adjudicated ex-parte.
  • The Hon’ble Court after taking note of law stated in Section 129 of the CGST Act, 2017, found that a plain reading of Section 129 shows that no goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods, on the allegations that the goods have been transported in contravention of the provisions of the Act.
  • Further after the perusal of the provisions in Section 129, it was found by the Hon’ble Court that in the present case apparently the proceedings have been initiated on the same date and concluded also on the same date.
  • Thereafter, the Hon’ble Court considering the submission advanced on the behalf of the respondents that ‘the proceedings were expedited at the instance of the tax payer on the same date’ found that there is nothing to substantiate such contention of the respondents. Thus, the impugned 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.

The Hon’ble Court with the above findings, set aside the impugned order dated 20th September, 2021 issued in Form GST MOV-09 and the appellate order dated 17th February, 2022 providing liberty to the respondents to take a fresh decision after due opportunity to the petitioner as provided under the Act.

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