Tvl. Kaniyamparampil Steels vs. The Joint Commissioner Of SGST (Intelligence)

Held

The Court held that once a final adjudication order is passed, the detention order merges with it. If the detention and the penalty imposed are not in accordance with law, the petitioner has the right to challenge the adjudication order before the appropriate authority. The learned Single Judge correctly observed that since a final order had been passed, the petitioner was granted liberty to challenge the adjudication order in the manner known to law. The Writ Appeal was filed against the detention order, which had merged with the final adjudication order, and the validity of the final order was not the subject matter of the writ petition. Therefore, the Writ Appeal was dismissed, confirming the order of the learned Single Judge. However, liberty was granted to the petitioner to prefer an appeal against the final adjudication order within one month from the receipt of the order, saving the limitation period.

Facts

The petitioner, Kaniyamparampil Steels, a trader in iron and steel products, was transporting goods worth Rs. 11,21,680/- from Kerala to Nagercoil. At the Sattur Toll, Virudhunagar District, the Roving Squad of the GST Department detained the vehicle and goods, alleging they were being shifted without proper invoices. The petitioner challenged the detention order in a writ petition, W.P(MD)No.29908 of 2024, and obtained an interim order for the release of the vehicle and goods. Subsequently, a penalty of 200% was imposed by proceedings dated 26.12.2024. When the writ petition came for final hearing, the court was informed that a final adjudication order had been passed and the vehicle released, leading to the closure of the writ petition.

Key Issues

1. Whether the detention of goods and vehicle was illegal and arbitrary, in violation of Rule 138A of the Central Goods and Service Tax Rules, 2017, and Section 16(2)(b)(i) of the Central Goods and Service Tax Act, 2017, considering the goods were intended for supply through a dealer to an end-user? Petitioner's arguments: The detention order was per se illegal and arbitrary, violating Rule 138A of the CGST Rules and Section 16(2)(b)(i) of the CGST Act. The detention was based on a misunderstanding of the law regarding the transportation of goods for supply. The subsequent penalty imposed was also challenged implicitly through the challenge to the detention. Revenue's arguments: Not recorded in the judgment.