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#GSTCase-184-Discrepancies in the Notice issued under Section 130; Order issued under Section 129 without giving opportunity of hearing

Sawariya Traders v. State of Gujarat [2020] 114 taxmann.com 497 (Gujarat)

Issue-Discrepancies in the notice issued under Section 130 of CGST Act

Petitioner brought to notice of Court about order of detention made under section 129(1) of CGST Act that same is totally silent as regards discrepancy noticed after physical verification of goods and conveyance. Referring to notice issued under section 130 of CGST Act in Form GST MOV-10, it was pointed out that

a) Grounds set out in notice have got nothing to do with goods which were in transit.

b) There is no allegation as regards any contravention in respect of the goods in transit. Reference was made to section 130 of the CGST Act to point out that the same contemplates five contingencies in which the action can be taken thereunder. It was submitted that, in the impugned notice, it has not been specified as to which of the five clauses of sub-section (1) of section 130 of the CGST Act has been infringed in the present case.

c) Notice under section 130 of the CGST Act has to be issued to the person who contravenes the provisions of the CGST Act whereas, in the facts of the present case, such notice has been issued to the driver, who would not be the proper person to answer such show-cause notice.

Held-Having regard to the submissions advanced by the learned advocate for the petitioners, issue Notice.

Kalpana Stores v. State of Tripura [2020] 113 taxmann.com 616 (TRIPURA)

Issue- Order U/sec 129 without giving proper opportunity of Hearing

Facts of the Case- The petitioner in the course of his business, purchased 3(three) bars of different measurements weighing approximately 25.990 Metric Tons for a sale consideration of Rs. 10.59 lakhs (rounded off). On such purchase according to the petitioner IGST of Rs. 1.90 lakhs (rounded off) was paid. Tax invoice to this effect was also generated. The seller had also generated e-Way bill dated 06.10.2018 for transport of the goods. According to the petitioner, along with all legal documents the consignment was being transported on 15.10.2018 when respondents intercepted transport vehicle, detained vehicle and seized goods. On 25.10.2018 the official respondents raised a demand of sum of Rs. 5,10,066 lakhs comprising of basic tax with penalty. The petitioner was under compulsion to deposit the said amount since failing which the State respondents would not release the goods or the vehicle. The petitioner made the payment and got the same released on 26.10.2018 after which the present petition came to be filed.

Contention of Petitioner- Action of State authorities are totally illegal and unlawful. Goods in question were fully covered by necessary documents of payment requisite taxes. The respondents raised an unlawful demand of tax with penalty without affording any opportunity of hearing to the petitioner.

Contention of Respondent- Order dated 25.10.2018 is an appealable order. The petitioner has directly approached the Court without availing such appeal.

Held: The determination of payable tax and interest in terms of clause (a) or (b) of sub-section (1) of section 129 upon payment of which goods or transport vehicle would be released or upon furnishing security in terms of clause (c), has to be after a notice to the person concerned and granting an opportunity of being heard in this respect as provided in sub-sections (3) and (4) of Section 129 of the said Act. In the present case, no such steps were taken. The State authority straightway passed the order dated 25.10.2018 which is titled as “Order of Demand of Tax and Penalty”. This order thus clearly breaches the requirement of sub-sections (3) and (4) of Section 129 of the said Act. In view of such facts despite availability of appellate remedy, present petition should be entertained. The said order is, therefore, quashed.

Since petitioner has already deposited amount indicated in said order dated 25.10.2018 and goods along with the transport vehicle are already released, High Court moulded the relief as under:

a) The respondents shall give a notice of hearing to the petitioner why the said tax with penalty demand should not be confirmed giving clear 4(four) weeks time to respond;

b) The petitioner will file written opposition to such demand with documents as may be found necessary within the said stipulated period;

c) The competent authority shall thereafter pass a speaking order within a period of 4(four) months from today;

d) The amount of Rs. 5,10,066 which is already deposited by the petitioner shall be adjusted towards the final crystallized tax/penalty if any as per such order. If the demand is dropped partially or fully, refund shall be made with statutory interest.

Anil Bapulal Patil v. State of Gujarat [2020] 114 taxmann.com 473 (Gujarat)

Issue: Release of Conveyance on payment of fine levied in lieu of confiscation of conveyance

Petitioner had sought direction to respondent department to release conveyance bearing No.MH-18-M-8155 on payment of fine of Rs.60,795/- in lieu of confiscation of conveyance. Respondents were directed to release Truck No.MH-18-M-8155 belonging to the applicant petitioner upon the petitioner depositing a sum of Rs.60,795/- proposed to be levied by way of fine in lieu of confiscation of conveyance in the notice issued by the respondents under section 130 of the CGST Act. Rule is made absolute accordingly with no order as to costs.

Suleman Valji Dayma V. State of Gujarat [2020] 114 taxmann.com 327 (Gujarat)

Issue: Release of Conveyance on payment of fine levied in lieu of confiscation of conveyance

Petitioner had sought direction to respondent department to release conveyance bearing No. GJ-01-DZ-8549 on payment of fine of Rs. 17,962/- in lieu of confiscation of conveyance. Respondents were directed to release Truck No. GJ-01-DZ-8549 belonging to the applicant petitioner upon the petitioner depositing a sum of Rs. 35,924/- proposed to be levied by way of fine in lieu of confiscation of conveyance in the notice issued by the respondents under section 130 of the CGST Act.