Where goods have already suffered tax and penalty, subsequent seizure of perishable goods in transit not tenable.
M/s Shri Venkateshvara Logistics Fleet Owners & Transport Contractors v. Asstt. Commr. of C.T. & C. Ex., Cus. & S.T., Vijaypur, cited in 2020 (41) G.S.T.L. 145 (Kar.)
The petitioner, a transporter, was engaged for transportation of 300 bags of arecanut from Nelamangala to Delhi. While the goods were in transit via truck registration no. HR-55-AF-7882, the vehicle was intercepted at Sagar, Shimoga District. On inspection of e-way bill & invoice, it was found by officials that the documents pertain to different consignment of 220 bags of areca by the supplier to same recipient (in Delhi) via different lorry with registration number MH-09-C-4289.
Accordingly, goods along with vehicle were seized vide detention order issued on 07.03.2019. A notice under Section 129(3) of CGST Act was also issued demanding payment of tax and penalty of equivalent value. Petitioner claimed that the invoice and e-way bill pertaining to different consignment was mistakenly handed over to the driver and the correct e-way bill along with invoice was shown to the officials at Shimoga, which was not accepted. Thus, tax and penalty, as quantified, was paid on 08.03.2019. Subsequent to payment, goods were Releasesd on 08.03.2019 and proceedings in respect of Section 129(3) stood concluded.
However, the goods were again intercepted on 10.03.2019 at Bijapur, which was followed by recording the statement of driver and carrying out physical verification of vehicle. Petitioner then requested the Additional Commissioner to Releases the goods as the tax and penalty was already paid and proceedings stood concluded. However, since the request was not acceded to and goods along with vehicle were not Releasesd, Petitioner approached the Hon'ble High Court for quashing the second order of detention, issued without authority of law.
Respondents, in their defence, submitted that after Releases of goods on 08.03.2019, a letter dated 09.03.2019 was addressed by Deputy Commissioner, Shivamoga to Assistant Commissioner, Bijapur stating that on verification, it was found that the supplier (M/s Venkataramana Traders) does not exist on the address where GST registration has been obtained and even movement of earlier transactions of arecanut by said supplier is suspicious and thus, request was made to intercept the vehicle again for verification of earlier supplies also.
Following this letter, another letters dated 12 March 2019 were addressed by Commissioner of Central Tax, Mysuru to Additional Commissioner and Assistant Commissioner, Bijapur stating that isupplier is believed to be fictitious' and directing the officials to seize said vehicle and goods. Subsequent thereto, investigation on various vendors of supplier (M/s Venkataramana Traders) followed in different parts of the country wherein it was discovered that they were also non-existent/fictitious.Ruling
Hon'ble High Court, after taking cognizance of the facts, inter-alia held that-
- Subsequent proceedings of detention of vehicle and goods at Bijapur were wrongly initiated under Section 129 of CGST Act (as contrary to proceedings under Section 67 claimed by the Respondent, in absence of proper procedure) even after first proceedings under Section 129(3) stood concluded already;
- As per Rule 141 of CGST Rules, 2017, seizure of perishable goods by Respondent was not justified more so when tax along with penalty is already paid on such goods; and,
- Goods and vehicle were directed to be Releasesd immediately with liberty to proper officer to continue their proceedings under Section 67 in order to determine the amount payable on previous supplies made by the supplier (investigation of fake invoices/bogus billing).
Hon'ble High Court further observed that the Act sufficiently provides that proper officer may physically verify the place of business of a registered person and registration can be cancelled if the person does not conduct any business therefrom. It was held that when supplier effected sale of value as high as Rs. 73 crores, the same must have been reported to GST authorities while availing tax credit thereon which could not have gone un-noticed and this was attributed to lackadaisical attitude of the department. Hon'ble Court further added that department, through the tools of audit, inspection, seizure, prosecution, recovery, etc. must verify whether registered assessees are actually conducting business from registered premises and take proactive steps in tracking movement of such consignments.