Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P.
WEDNESDAY, THE 24TH DAY OF JULY 2024 / 2ND SRAVANA, 1946 WP(C) NO. 4244 OF 2024 PETITIONER:
VELAYUDHAN GOLD LLP, HAVING ITS OFFICE AT ROOM NO.27/22/3, JUBILEE ROAD, PERINTHALMANNA P.O, MALAPURAM DISTRICT, KERALA-679 322, REPRESENTED BY ITS DESIGNATED PARTNER DILJITH K.K, AGED 25 YEARS, S/O.RAJAN K.K, RESIDING AT KOLAVARKUNATH HOUSE, RAMAPURAM P.O., MALAPURAM DISTRICT, PIN – 679 321.
BY ADVS.
M.P.SHAMEEM AHAMED AKHIL PHILIP MANITHOTTIYIL DANIYA RASHEED PALLIYALIL NAEEM M.M RESPONDENTS:
1 INTELLIGENCE OFFICER, INTELLIGENCE UNIT, KOTTARAKARA, O/O.THE SENIOR INTELLIGENCE OFFICER / INTELLIGENCE OFFICER OF STATE TAX, INTELLIGENCE UNIT, KOTTARAKKARA, SGST COMPLEX, BAPUJI NAGAR, ASRAMAM, KOLLAM, PIN – 691 002.
2 INTELLIGENCE OFFICER, INTELLIGENCE UNIT 3 SGST DEPARTMENT, ERNAKULAM, OFFICE OF THE INTELLIGENCE OFFICER, INTELLIGENCE UNIT NO.3, ERNAKULAM SGST DEPARTMENT, KERALA 2ND FLOOR, KUREEKAL BUILDING, EDAPALLY, KOCHI, PIN – 682 024.
3 DEPUTY COMMISSIONER, INTELLIGENCE, STATE GST DEPARTMENT, ERNAKULAM,KUREEKAL BUILDING, EDAPALLY, ERNAKULAM, PIN – 682 024.
4 STATE OF KERALA, REPRESENTED BY GOVERNMENT PLEADER, HIGH COURT OF KERALA, PIN – 682 031.
SRI. MUHAMMED RAFIQ (SPL. GP) THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24.07.2024, ALONG WITH WP(C).6114/2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NOS. 4244 AND 6114 OF 2024 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P.
WEDNESDAY, THE 24TH DAY OF JULY 2024 / 2ND SRAVANA, 1946 WP(C) NO. 6114 OF 2024 PETITIONER:
THE JOINT COMMISSIONER OF STATE TAX(LAW), STATE GOODS AND SERVICES TAX DEPARTMENT, ERNAKULAM, PIN – 682 015.
BY SRI. MUHAMMED RAFIQ (SPL. GP) RESPONDENT:
M/S.VELAYUDHAN GOLD LLP, PERINTHALMANNA, MALAPPURAM, PIN – 679 321.
BY ADVS.
SRI. M.P.SHAMEEM AHAMED SRI.AKHIL PHILIP MANITHOTTIYIL SRI. DANIYA RASHEED PALLIYALIL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.07.2024, ALONG WITH WP(C).4244/2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NOS. 4244 AND 6114 OF 2024 3 JUDGMENT These writ petitions relate to an order bearing No.GSTA- 665M/2023 dated 12.12.2023 passed by the Joint Commissioner (Appeals), Thrissur in proceedings under Section 107 of the CGST / SGST Acts. The petitioner (assessee) in W.P.(C)No.4244 of 2024 seeks an implementation of the order of the Appellate Authority. W.P(C)No.6114 of 2024 has been filed by the State challenging the aforesaid order of the Appellate Authority. Both these writ petitions came to be filed before this Court on account of the fact that the Tribunal to be constituted under the CGST / SGST Acts to consider a further appeal under Section 112 of the CGST / SGST Acts has not so far been constituted. The parties and the exhibits referred to in this judgment are as they appear in W.P.
(C)No.4244 of 2024.
2.
The brief facts are as follows:- The petitioner is an assessee under the CGST / SGST Acts duly registered under the provisions of those enactments. It is a wholesale dealer in gold jewellery. It is submitted that as part of its business, the petitioner carries gold jewellery of different designs to various jewellery shops for the display of designs etc. It is stated
WP(C) NOS. 4244 AND 6114 OF 2024 4 that on 26.05.2023 the employees of the petitioner had scheduled a visit to a jewellery known as Sobhana Jewellers in Ottapalam. It is the case of the petitioner that its employees accordingly packed 1647.970 grams of gold jewellery in multiple packs and had prepared delivery challan No.DC/23-24/7 dated 26.05.2023. It is stated that in the challan the purpose for which the gold was being carried was stated to be for display purposes. It is the case of the petitioner that while preparing the delivery challan, the details of approximately 315.400 grams of gold was not included in the delivery challan on account of a clerical error. However, it is stated that the details were duly entered in the stock register. It is stated that while the employees of the petitioner were visiting the aforesaid Sobhana Jewellers, the 1st respondent in the writ petition carried out a search operation at Sobhana Jewellers. It is stated that on being questioned, the employees of the petitioner had revealed that they had come to the shop for the purposes of displaying gold ornaments as a part of their business. Since there was a difference in the quantity mentioned in the delivery challan and in the actual quantity of gold (owing to the clerical mistake while preparing the delivery challan) the 1st respondent seized the
WP(C) NOS. 4244 AND 6114 OF 2024 5 gold in exercise of his powers under Section 67(2) of the CGST / SGST Acts. The matter was thereafter adjudicated through Ext.P4 order by the 2nd respondent, who held that the entire quantity of gold was liable to be confiscated and also imposed a total penalty of Rs.2,75,128/-. The 2nd respondent also imposed a fine in lieu of confiscation of goods at Rs.88,95,826/-. Being aggrieved by Ext.P4 order, the petitioner preferred an appeal before the 1st Appellate Authority, who by Ext.P5 order found that the imposition of penalty and fine in lieu of confiscation in respect of 1332.590 grams was not proper and found that the proceedings could be continued only in respect of the balance of 315.400 grams, which were not covered by the documents at the relevant time. Therefore, the 1st Appellate Authority imposed a penalty as also a fine in lieu of confiscation in respect of the aforesaid quantity of 315.400 grams of gold. It is thus that the petitioner is before this Court seeking implementation of Ext.P5 order by releasing 1332.590 grams of gold which were no longer subject matter of any proceeding as also the balance quantity of 315.400 grams of gold as the petitioner had paid the penalty and redemption fine imposed by the 1st Appellate Authority, while the State is before
WP(C) NOS. 4244 AND 6114 OF 2024 6 this Court by filing the connected writ petition being aggrieved by the finding of the 1st Appellate Authority and contending that the 1332.590 grams of gold cannot be exempted from the proceedings on the ground that it was covered by a delivery challan at the time of seizure. It is the case of the State that the delivery challan in question does not relate to the said quantity and related to some other consignment of gold.
3.
The learned counsel appearing for the petitioner and the learned Special Government Pleader appearing for the State addressed extensive arguments on the merits of the matter.
However since it is expected that the GST Tribunal will be constituted without further delay, I do not intend to enter into the merits of the contentions raised by either side.
4.
The learned counsel appearing for the petitioner placed reliance on the judgment of a Division Bench of this Court in W.A.No.303 of 2024 and connected cases to contend that in cases like these where the State is aggrieved by the order of the adjudicating authority or the Appellate Authority directing release of some seized material and the assessee / importer is before the Court seeking implementation of the said order by releasing the
WP(C) NOS. 4244 AND 6114 OF 2024 7 seized material, the Court should direct the release of the material against a simple bond along with details of any immovable property that can be proceeded against to enforce the liability under the bond if such situation is warranted on a culmination of the proceedings.
5.
The learned Special Government Pleader, on the other hand, relies on the judgment of a Division Bench of this Court in Assistant State Tax Officer and Another v. M/s. Indus Towers Limited [2018 KHC 498] to contend that in the facts and circumstances of the case, the availability or otherwise of a delivery challan has no bearing on the proceedings initiated against the petitioner as a delivery challan is a document that is capable of manipulation.
6.
The petitioner has filed I.A.No.2 of 2024 producing therewith copies of title deed No.1086/2023 of Makkaraparamba S.R.O belonging to one of the designated partners of the petitioner namely Mr.Diljith K K as also a copy of title deed No.1479/2008 of Makkaraparamba S.R.O belonging to one Mohandas K K, who is the father of another designated partner namely Rishikesh K K.
The property covered by Ext.P9 document belonging to the
WP(C) NOS. 4244 AND 6114 OF 2024 8 aforesaid Diljith K K has an extent of 1.02 Ares while the property covered by Ext.P10 belonging to Mr.Mohandas K K has an extent of 52.22 Ares. The learned counsel appearing for the petitioner would submit that the petitioner is willing to produce a bond of the aforesaid Diljith K K as also the aforesaid Mohandas K K, undertaking that in the case of any tax, penalty or fine being imposed on a culmination of the proceedings and the petitioner not being in a position to pay the same, the property covered by Exts.P9 and P10 documents can be proceeded with for recovery of any amount due to the State.
7.
Though the learned Senior Government Pleader would contend that the goods in question in this case (namely the gold ornaments) are liable for confiscation, since it is settled that the goods can be released on the payment of fine in lieu of confiscation and considering the fact that the gold ornaments are stock-in- trade of the petitioner, I am inclined to dispose of these writ petitions without going into the merits of the contentions raised by either side and directing that the entire quantity of 1647.970 grams of gold which has been seized from the petitioner shall be released on the aforesaid Diljith K K and the aforesaid Mohandas K K
WP(C) NOS. 4244 AND 6114 OF 2024 9 executing bonds in the manner and form required by the 2nd respondent. The aforesaid Diljith K K and the aforesaid Mohandas K K will undertake that they will not alienate the property covered by Exts.P9 and P10 documents till the culmination of proceedings.
The petitioner as also the State will thereafter be entitled to approach the Appellate Tribunal (yet to be constituted) if they are in any manner aggrieved by the proceedings of the Appellate Authority. I make it clear that I have not expressed any opinion on the merits of the contentions raised by either side and the Appellate Tribunal (as and when it is constituted) shall consider any appeal filed by either of the parties on merits and untrammelled by any observation contained in this judgment. It is made clear that the seized gold ornaments shall be released as directed above, immediately on the bonds as directed above being executed by the parties.
Writ petition ordered accordingly.
Sd/- GOPINATH P.
JUDGE DK
WP(C) NOS. 4244 AND 6114 OF 2024 10 APPENDIX OF WP(C) 6114/2024 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF DELIVER CHALLAN BEARING NO. DC/23-24/7 DATED 26.05.2023 Exhibit P2 TRUE
COPY
OF
THE
ORDER
OF CONSIFICATION PASSED UNDER SECTION 130 OF THE CGST/SGST ACTS 2017 BY THE INTELLIGENCE OFFICER, INTELLIGENCE UNIT 3, ERNAKULAM DATED 23.09.2023 Exhibit P3 TRUE COPY OF THE PASSED BY THE JOINT COMMISSIONER(APPEALS), THRISSUR IN GSTA 665M/2023 DATED 12.12.2023 RESPONDENT EXHIBITS Exhibit R1 A COPY OF THE CIRCULAR NO. 10/10/2017 DATED 18.10.2017 Exhibit R2 A COPY OF THE CHALLAN NO.DC/23-24/7 Exhibit R3 A COPY OF THE JUDGMENT DATED 31.10.2023 IN WA.NO.1903/2023 Exhibit R4 A COPY OF THE STATEMENT RECORDED BY THE INTELLIGENCE OFFICER, INTELLIGENCE UNIT, KOTTARAKKARA FROM RIDHESH T.P OF SOBHANA JEWELLERY UNDER SEC 70 OF THE CGST
ACT
ALONG
WITH
ENGLISH TRANSLATION
WP(C) NOS. 4244 AND 6114 OF 2024 11 APPENDIX OF WP(C) 4244/2024 PETITIONER EXHIBITS Exhibit P1 COPY OF THE CHALLAN NO. DC/23-24/7 Exhibit P2 COPY OF THE SEIZURE MEMO DATED 26.05.2023 ISSUED BY THE1ST RESPONDENT Exhibit P3 COPY OF THE STATEMENT RECORDED BY THE 1ST RESPONDENT FROM RIDHESH T.P OF SOBHANA JEWELLERY UNDER SEC 70 OF THE CGST
ACT
ALONG
WITH
ENGLISH TRANSLATION Exhibit P4 COPY
OF
THE
ORDER
NO.
INTU-III/GST/1/23-24 DATED 23.09.2023 PASSED BY THE 2ND RESPONDENT Exhibit P5 COPY OF THE ORDER IN APPEAL NO.AD321123004283W DATED 12.12.2023 PASSED BY THE JOINT COMMISSIONER (APPEALS), STATE GOODS AND SERVICE TAX DEPARTMENT Exhibit P6 COPY OF THE PAYMENT RECEIPT DATED 05.01.2024 Exhibit P7 A COPY OF THE LETTER DATED 06.01.2023 FILED BY THE PETITIONER BEFORE THE INTELLIGENCE OFFICER, INTELLIGENCE UNIT-3, ERNAKULAM Exhibit P8 COPY
OF
THE
REMINDER
LETTER ACKNOWLEDGED ON 17.01.2024 Exhibit P9 COPY OF THE TITLE DEED 1086 / 2023 FROM MAKKARAPARAMBA SRO Exhibit P10 COPY OF THE TITLE DEED 1479 / 2008 FROM MAKKARAPARAMBA SRO