M/S Meghdoot Logistics vs. Commercial Tax Officer (Enforcement - 30)
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The petitioner, M/s. Meghdoot Logistics, challenged a notice dated 02.09.2020 issued by the Commercial Tax Officer (respondent No. 1) for the confiscation of goods and conveyance under Section 130 of the Central Goods and Services Tax Act, 2017, and related state and integrated GST Acts. The petitioner also sought a direction for the detained goods, under detention since 05.08.2020 under Section 129(1) of the CGST Act and KGST Act, to be kept in cold storage. The respondents submitted that a similar matter, W.P.No.10832/2020, had been disposed of by the Court on 21.12.2020, and requested the present petition be decided similarly. The petitioner highlighted that their reply to the Section 129 notice was to be considered within a specified time and sought an opportunity to scrutinize materials relied upon by the revenue.
Held
The Court disposed of the writ petition in terms of the observations and directions made in W.P.No.10832/2020. The respondents were directed to proceed further and consider the reply submitted by the petitioner concerning the notice under Section 129, as well as the reply to be submitted to the show cause notice under Section 130. The respondents were also to consider further proceedings under Section 130 after the petitioner furnished their reply. The petitioner was permitted to seek incriminatory material by submitting a representation within three days, which the respondent authority was to consider as per law. Thereafter, within three days of the respondent sharing the requested information, the petitioner was to furnish their reply to the show cause notice. The respondent authority was to take a decision within one week thereafter. An opportunity of personal hearing would also be afforded while considering the reply to the show cause. The request for non-examination by the petitioner would be considered as per law. The contentions of the parties were kept open.
Key Issues
1. Whether the notice for confiscation of goods and conveyance under Section 130 of the CGST Act, KGST Act, IGST Act, and GST (Compensation to States) Act, 2017, is valid, considering the petitioner's right to defend the proceedings and scrutinize relied-upon material? (Mixed law and fact, turning on Sections 129 and 130 of the CGST/KGST Acts). Petitioner's arguments: The petitioner contended that they were entitled to an opportunity to subject the materials relied upon by the revenue authority for issuing the show cause notice to strict scrutiny, as it was part of their right to defend the proceedings. They also emphasized that their reply to the Section 129 notice was to be considered within a specified timeframe. Revenue's arguments: The respondents submitted that the present petition was factually and legally similar to W.P.No.10832/2020, which had been disposed of by the Court, and requested that the current petition also be disposed of in terms of the observations and directions made in the earlier order. They agreed to abide by the directions regarding the procedure for proceedings under Sections 129 and 130.
Sections Cited
Section 130, Section 129, Section 20, Section 11
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Cause title — parties, addresses and appearances
O R D E R
The petitioner has challenged the notice dated 02.09.2020 vide No.Adcom/ENF/SZ/CTO-30/AM/DTN-08/2020-21 issued by the 1st respondent for confiscation of goods and conveyance under Section 130 of the Central Goods and Services Tax Act, 2017 and Section 130 of the Karnataka Goods and Services Tax Act, 2017 read with Section 20 of Integrated Goods and Service Tax Act, 2017 and Section 11 of the GST (Compensation to States) Act, 2017 as per Annexure-A and further direction was sought to the 1st respondent to keep the goods contained in conveyance bearing No.HR38X1224, under cold storage, as detained by the 1st respondent vide order dated 05.08.2020 bearing No.Adcom/ENF/SZ/CTO-30/AM/DTN-08/2020-21 under Section 129(1) of the CGST Act and KGST Act as per Annexure- D1 and/or grant any other relief as deemed fit in the interest of justice.
3
The learned counsel appearing for the respondents submits that identical notices in a similar factual matrix was in challenge before this Court in W.P.No.10832/2020 which came to be disposed off on 21.12.2020 in terms of the detailed observations and directions contained in the said order.
Learned counsel for respondents submits that the present petition may also be disposed off in terms of the observations made in W.P.No.10832/2020 considering the similarity of the contentions raised as were raised in W.P.No.10832/2020. 4. Learned counsel for the petitioner submits that in terms of the interim direction passed earlier, the petitioner who had already submitted reply for the issue under Section 129(3) of CGST/KGST Act was required to be considered within a specified time schedule.
It is further submitted that the petitioner had also appeared before the respondent and submitted their say and reply to the show cause.
4
Learned counsel for the petitioner however submits that as regards some of the materials relied by the respondent – authority for issuance of show cause notice, the petitioner is required to be afforded an opportunity to subject such material for strict scrutiny which would be part of right of defending the proceedings initiated by the respondent – authority.
Taking note of the statement of learned counsel for the respondents that they would abide by the directions as contained in W.P.No.10832/2020, insofar as the procedure for taking forward the proceedings under Sections 129 and 130 are concerned, the present writ petitions could be disposed off in terms of the observations and directions made in W.P.No.10832/2020. The respondents to proceed further and consider the reply made by the petitioner insofar as notice under Section 129 and also with respect to the reply to be submitted to the show cause notice under Section 130. The respondents to also consider the further proceedings under Section 130 after reply is furnished by the petitioner in that regard.
Learned counsel for the petitioner is permitted to seek for incriminatory material by addressing the representation
5 within three days from today and said request to be considered as per law by the respondent – authority. Thereafter, within three days from such date of the respondent sharing information as requested and permissible to be shared, reply to the show cause to be furnished by the petitioner and the respondent – authority to take decision thereafter in terms of the observations made above within a period of one week thereafter.
Learned counsel for the respondents submits that an opportunity of personal hearing will also be afforded while considering the reply to the show cause. It is further submitted that the request for non-examination made by the petitioner would be considered as per law.
Accordingly, the petition is disposed off. The contentions of the parties are kept open.
I.A.No.1/2020 is disposed off as requiring no further orders. JUDGE
NS
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.