Chelaram vs. The State Of Karnataka And Ors

Though the petition is listed today for preliminary hearing, with the consent of learned counsel for the respective parties, it is heard finally.

The captioned Writ Petition is filed seeking a Writ of Certiorari to quash the show cause notice in FORM GST MOV-07 dated:20.02.2024 issued by the Assistant Commissioner of NC: 2024:KHC-K:1729 Commercial Taxes (Enforcement), Bidar - third respondent vide Annexure-G.

The brief facts are these: The petitioner Chelaram S/o.Dargaram.G is the Proprietor of M/s.New Basveshwar Traders, Shop No.1-4-2012, Subhash Chowk, Near Railway Gate, Bhalki, Taluka Bhalki, District Bidar vide GSTIN: 29AUEPC1708P1ZG. It is said that one Dattatrya S/o.Kashinath Rao is Driver cum owner of the goods vehicle bearing Registration No.KA-07-8529 and he was carrying goods such as MS Angle/ MS Flat Steel from Bhalki to Narayankhed, Telangana with e-Way Bill No.151795420143 and 101795420320 dated:03.02.2024 and Tax Invoice No.318 and 319 dated:03.02.2024 total two types Steel cultivator and Steel Angle belongs to the petitioner Chelaram. It is said that the said goods vehicle was moving towards Telangana State nearby Subhash Chowk, Bhalki on 03.02.2024 at 5:00 a.m., the said vehicle was intercepted by the third respondent officers and asked the Driver to tender the documents issued under FORM GST MOV-2 for verification. The Driver of the vehicle failed to tender the documents. Hence, the NC: 2024:KHC-K:1729 third respondent issued the FORM GST MOV-II and suspected the excess quantity of goods under transportation. As things stood thus, the petitioner Chelaram being the owner of the goods has given undertaking letters on 05.02.2024 and 14.02.2024 before the third respondent contending that he is ready to pay permissible tax along with penalty under Section 129(1)(a) of Central Goods and Service Tax Act, 2017 and sought for release of the goods and the vehicle. However, the third respondent without according the request of the petitioner, calculated the applicable tax and penalty under Section 129(1)(b) of the CGST Act, 2017 and issued show cause notice to the petitioner on 20.02.2024 to give a reply within seven days, failing which appropriate action will be taken. It is this show cause notice that is called into question in this Writ Petition on several grounds as set-out in the Memorandum of Writ Petition.

Learned counsel for the petitioner and AAG for the respondents have urged several contentions. Sri.Sudhirsingh R.Vijapur., learned counsel for the petitioner in presenting his arguments strenuously urged that NC: 2024:KHC-K:1729 the petitioner is the owner of the goods and he has already submitted necessary documents for verification before the third respondent. He argued by saying that the petitioner is ready to pay applicable tax and penalty as per Section 129(1)(a) of the CGST Act, 2017. Hence, he submits that there is no inconvenient for the third respondent to release the seized goods and the vehicle. By way of reply to this contention, learned AAG submits that the Assistant Commissioner is right in calculating the applicable tax and the penalty under Section 129(1)(b) of the CGST Act, 2017. He argued by saying that the Assistant Commissioner has issued only a show cause notice. Hence, he submits that the Writ Petition is devoid of merits and appropriate order may be passed. The rival contentions urged on behalf of the respective parties is placed on record.

The specific contention of the petitioner - Chelaram is that he is the owner of the goods that were carried in vehicle bearing Registration No.KA-07-8529 that was intercepted by the third respondent Officers on 03.02.2024. Suffice it to note NC: 2024:KHC-K:1729 that the petitioner requested the Assistant Commissioner on 05.02.2024 and 14.02.2024 contending that the requisite documents for verification has been submitted by him and he is also ready to pay the applicable tax and penalty under Section 129(1)(a) of the CGST Act, 2017. Annexures-E and F are the undertaking given by the petitioner. A perusal of the same would reveal that the petitioner is ready to pay the applicable tax and penalty under Section 129(1)(a) of the CGST Act, 2017. However, the Assistant Commissioner went ahead and issued show cause notice on 20.02.2024. The show cause notice at Annexure-G would reveal that the Assistant Commissioner of Commercial Tax (Enforcement), Bidar has issued a show cause notice stating that the Driver Dattatrya has not tendered any documents for the goods in movement, went ahead and calculated the applicable tax and penalty under Section 129(1)(b) of the CGST Act, 2017. 7. In view of the fact that the petitioner has come forward to pay the applicable tax and penalty under Section 129(1)(a) of the CGST Act, 2017, the third respondent is hereby directed to calculate the applicable tax and penalty NC: 2024:KHC-K:1729 under Section 129(1)(a) of the CGST Act, 2017 within three days from the date of receipt of the certified copy of this order. Upon receipt of the applicable tax and penalty, the Assistant Commissioner of Commercial Taxes (Enforcement), Bidar is directed to release the seized goods and the vehicle bearing Registration No.KA-07-8529. Needless to observe that the Writ Petition is filed as against the issuance of show cause notice. Hence, the petitioner is at a liberty to file reply to the impugned show cause notice. If reply is filed to the show cause notice, the Assistant Commissioner – third respondent is directed to consider the reply and pass appropriate orders in accordance with the CGST Act, 2017. It is made clear that payment of applicable tax and penalty under Section 129(1)(a) of the CGST Act, 2017 is subject to the outcome of the final order that would be passed by the Assistant Commissioner of Commercial Taxes (Enforcement), Bidar on impugned notice. Needless to observe that this Court has not expressed any opinions on the merits of the case. NC: 2024:KHC-K:1729

Resultantly, the Writ Petition is disposed of. JUDGE VNR/TKN List No.: 1 Sl No.: 10