The Industrial And Laboratory Equipment Co. vs. The Assistant State Tax Officer - Kerala High Court, 04 February 2020

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS TUE AY, THE 04TH DAY OF FEBRUARY 2020 / 15TH MAGHA, 1941 WP(C).No.1700 OF 2020(J) PETITIONER: THE INDUSTRIAL AND LABORATORY EQUIPMENT CO. P.B.NO.5701,KILLIPPALAM JN., THIRUVANANTHAPURAM-695036,REPRESENTED BY ITS MANAGER S.SANTHOSH KUMAR. BY ADVS. SRI.S.ANIL KUMAR (TRIVANDRUM) SRI.M.RAJAGOPAL SHRI.RAHUL A. RESPONDENTS: 1 THE ASSISTANT STATE TAX OFFICER, SURVEILLANCE SQUAD NO.II,STATE GOODS AND SERVICES TAX DEPARTMENT, THIRUVANANTHAPURAM-695002. 2 THE DEPUTY COMMISSIONER(APPEALS), STATE GOODS AND SERVICES TAX DEPARTMENT,TAX TOWERS,KARAMANA, THIRUVANANTHAPURAM-695002. 3 THE COMMISSIONER OF STATE TAXES, STATE GOODS AND SERVICES TAX DEPARTMENT, TAX TOWERS,KARAMANA, THIRUVANANTHAPURAM,PIN-695002. DR.THUSHARA JAMES, GOVT.PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.1700 OF 2020(J) 2 ALEXANDER THOMAS, J ============================ WP(c) NO. 1700/2020 ============================================== Dated this the 4th day of February 2020 J U D G M E N T The prayers in the above writ petition civil are as follows: (a) Issue a writ of certiorari, or any other appropriate writ, order or direction as this Hon'ble Court deems fit and proper in the circumstances of this case, calling for the records leading to the issue of Ext.P5 order and Ext.P5(a) notice and after scrutinizing the same, to strike down and quash them: (b) issue a writ of mandamus or other appropriate writ, orders or directions directing the 1st respondent to refrain from proceeding further under section 129 of the Act based on Ext.P5 and P5(a). (c) issue a writ of mandamus or other appropriate writ, orders or directions directing the respondent to release the goods to the petitioner without collecting any security under section 129(1)(c).

The facts narrated in this writ petition (civil) are as follows: That the petitioner is the registered person under the Central Goods and Services Tax Act and also under the GST law in the State and was granted provisional registration under the State Goods and Services Tax Act, 2017. The petitioner purchased tow Uniblock Precision Platform Balances for Rs.1,84,800/- (Rs.2,18,064/- inclusive of tax) from M/S. The I.L.E. Co., 21, Poomagal Main Road, Ekkattuthangal, Chennai-600032 as per Ext.P1 invoice. After preparing Part A of e-way bill (Ext.P2), the goods were entrusted by the supplier to the transporter who was expected to fill up part

WP(C).No.1700 OF 2020(J) 3 B of the E-way bill, which was inadvertently not done by the transporter. But the 1st respondent detained the goods and recorded the statement of the driver and conducted physical Ext.P3, wherein it was notified that “Note valid for movement as Part-B is not entered” and issued Ext.P4 physical verification report. Even though the petitioner explained the entire matter before the 1st respondent, he issued Ext.P5 order of detention and also issued Ext.P5(a) notice under section 129(3) of the SGST Act alleging attempt of evasion of tax due under the Act and demanding the tax and penalty amounting to Rs.66,528/- on the following grounds. “Not valid for movement as Part-B is not entered” Eventhough, the petitioner filed Ext.P6 reply, the 1st respondent has refused to release the goods and the vehicle, overlooking circular No.41/15/2018-GST dated 13/04/2018, issued by the Government of India and also the judgment of this Court in Indus Towers Ltd. (M/s.) Cochin Vs. Assistant State Tax Officer, Squad No. VII, Ekm an another [2018 (1) KHC 964] and also Ext.P7 judgment and Ext.P8 order of the Supreme Court. Petitioner has not alternate remedy.

The counsel for the petitioner would place reliance on provisions under section 126(1) of the State GST Act. Per contra, learned Government Pleader would submit that the present default is only a minor breach in terms of Section 126 (part of the KVAT Act) is not tenable for the

WP(C).No.1700 OF 2020(J) 4 simple reason that explanation appended to Section 126(1) of the State GST Act had made it clear like the day light that the breach shall be considered as a minor breach, if the amount of tax involved is less than Rs.5000/-, whereas, in the instant case, the tax component as per the impugned Ext.P5 comes to Rs.33,264/- and the penalty component is also of the same amount, and that the total amount comes to Rs.66,528/- and therefore the petitioner cannot contend that the default in non-production of part B of the e-way bill is a minor breach. Further that, part B of the e-way bill is the most important and basic document in the transaction in a case like this, going by the mandatory provisions contained in the GST Act, more particularly, Sections 138 and 138(5)A thereof.

After hearing both sides and after careful evaluation of the facts and circumstances of this case, it is ordered that the 1st respondent shall forthwith release the detained vehicle and goods which is the subject matter in the impugned Ext.P5(a), detention order, on the petitioner furnishing bank guarantee to the value of the amounts shown in the impugned Ext.P7 proceedings which comes to a total amount of Rs.66,528/-. Further it is ordered that, thereafter the 1st respondent will ensure that the adjudicated proceedings pursuant to Ext.P5 impugned proceedings may be finalized by the said officer after affording reasonable opportunity of being heard to the petitioner through authorised officers or

WP(C).No.1700 OF 2020(J) 5 counsel if any without much delay, preferably within a period of 4 weeks from the date of production of a certified copy of this judgment. With these observations and directions, the above Writ Petition (Civil) stands finally disposed of. ALEXANDER THOMAS N //// PA TO JUDGE JUDGE

WP(C).No.1700 OF 2020(J) 6 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF INVOICE DATED 13.11.2019 EXHIBIT P2 COPY OF THE THE E-WAY BILL NO.551146891176 DATED 13/11/2019 EXHIBIT P3 COPY OF ORDER DATED 15.11.2019 IN GST MOV- 02 ISSUED BY THE 1ST RESPONDENT FOR PHYSICAL VERTIFICATION. EXHIBIT P4 COPY OF PHYSICAL VERTIFICATION REPORT DATED 15-11-2019 EXHIBIT P5 COPY OF DETENTION ORDER DATED 15-11-2019 ISSUED BY THE 1ST RESPONDENT EXHIBIT P5(A) COPY OF NOTICE DATED 15-11-2019 ISSUED BY THE 1ST RESPONDENT U/S.129(3)OF THE CGST/SGST ACT. EXT.P6 COPY LETTER DATED 29.11.2019 ADDRESSED TO THE 2ND RESPONDENT. EXT.P7 COPY OF JUDGMENT OF THE HON'BLE HGH COURT OF ALAHABAD IN VSL ALLOYS INDIA PVT.LTD. (2018-TIOL-2859-HC-ALL-GST), EXT.P8 COPY OF ORDER DATED 19.09.2018 IN SPECIAL LEAVE TO APPEAL (C)NO/.17073/20198 OF THE HON'BLE SUPREME COURT.