M/S Raj Enterprises vs. Assistant Commissioner Of Commercial Taxes

Held

The High Court held that it would not be appropriate to make a factual finding on whether the appellant should be treated as the owner under the circular dated December 31, 2018, and thus whether clause (a) of Section 129(1) is applicable. This determination is to be left to the concerned authority. The Court directed that while passing a speaking order as per the Single Judge's direction, the authority must consider whether the appellant can be treated as the owner in light of the circular dated December 31, 2018. Furthermore, the authority must consider if the release of detained goods can be permitted upon the appellant furnishing security as provided in clause (c) of sub-section (1) of Section 129 of the said Act. The time for the appellant to file additional explanation and documents was extended by one week.

Facts

M/s. Raj Enterprises, the appellant, challenged an order of detention and a notice issued under Section 129 of the Central Goods and Services Tax Act, 2017. The appellant argued that the notice invoked clause (b) of Section 129(1), which presumes ownership, while a circular dated December 31, 2018, states that if an invoice accompanies the goods, either the consignor or consignee should be deemed the owner, making clause (a) applicable. The appellant also contended that clause (c) of Section 129(1) offered an alternative for release. The revenue argued that there was a dispute regarding the genuineness of documents and the appellant's status as consignor or consignee. The Single Judge had permitted the appellant to file additional documents and directed the authority to pass a speaking order.

Key Issues

1. Whether, in light of the circular dated December 31, 2018, the appellant should be treated as the owner of the detained goods under clause (a) of sub-section (1) of Section 129 of the Central Goods and Services Tax Act, 2017, instead of clause (b) as invoked by the notice? Appellant's arguments: The appellant contended that the circular dated December 31, 2018, specifically clause (6), mandates that if an invoice or other specified document accompanies the consignment, either the consignor or consignee should be deemed the owner. Since the invoice and documents were with the detained goods, clause (a) of Section 129(1) should apply, even if a penalty is payable. The appellant also argued that clause (c) of Section 129(1) provides an option for release of detained goods. Revenue's arguments: The revenue argued that there is a serious dispute concerning the documents produced by the appellant, necessitating a determination of whether the appellant is a consignee or consignor and whether the accompanying documents are genuine.