Goel Plywood Centre vs. State Of Andhra Pradesh - Andhra Pradesh High Court, 06 August 2020

Cause title — parties, addresses and appearances

THE HON’BLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HON’BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION No.12276 of 2020 ORDER: (Per Lalitha Kanneganti, J) The writ petition is filed under Article 226 of the Constitution of India seeking Writ of Mandamus to declare the orders dated 24.06.2020 passed in MOV-9 thereby seizing 80 nos. of Plywood Sheets worth Rs.54,548/- despite showing all the invoices with requisite payment of taxes, as illegal, arbitrary and contrary to the Andhra Pradesh Goods and Services Tax Act, 2017 (for brevity “AP GST Act”) and Rules framed thereunder. 2. Heard the learned counsel for the petitioner and the learned Government Pleader for Commercial Taxes for the respondents and with their consent, this writ petition is disposed of at the admission stage. 3. The case of the petitioner is that the petitioner is engaged in plywood business for the past 5 years without any adverse remarks from any corner and he has been paying taxes which are payable to both State and Centre. He was sending plywood sheets to one MD Zulkhanamic Agenices, JM Street, Kadapa. Initially in the morning of 17.06.2020 they ordered for only 50 plywood sheets worth Rs.40,000/- and later in the evening, when the vehicle was about to start, the buyer called the petitioner office and asked to send additional 30 plywood sheets. Then he informed them that he already billed and the vehicle is about to start. But as the buyer was insisting, he prepared another invoice with requisite payment of SGST and CGST for 30 plywood sheets and sent the 2 vehicle. The said vehicle was seized by 3rd respondent on the same day and issued form MOV-01 to MOV-06. The petitioner submitted his explanation on the same day bringing it to the notice of respondents the above facts. But without considering his explanation, the 3rd respondent imposed 100% penalty on the tax already paid by him. 4. Learned counsel for the petitioner would submit that it was never their intention to avoid the tax and it was mistake in the process and when they consulted an Advocate they came to know that whenever the value of goods is above Rs.50,000/-, an e-way bill is required for movement of goods even within the State. Learned counsel would further submit that the petitioner paid requisite taxes both SGST and CGST in both invoices and the only mistake on the part of petitioner is that he has not raised e-way bill. He would further submit that in these times of Corona pandemic, the petitioner is running business with great difficulty and receiving 4 to 5 orders per day and imposing 100% penalty would be very onerous on the petitioner, as they are already running into losses. Hence he only seeks that the penalty imposed may be lifted, as the 3rd respondent without considering all these

issued has passed the order.

Per contra, learned Govt. Pleader for Commercial Taxes would submit that as per Section 129 (1) (a) of the Central Goods and Services Tax Act, 2017 (for brevity “CGST Act”), 100% penalty is stipulated and thus, he supported the order of the respondents. He would further submit that the petitioner has a right of appeal against the order passed by the 3rd respondent, but without

exhausting the said remedy, the petitioner has straightaway approached this Court.

Before going into the merits of the case, we feel it appropriate to extract Section 129 (1) (a) to (c) of CGST Act.

129.

Detention, seizure and release of goods and conveyances in transit.––(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,–– (a) on payment of the applicable tax and penalty equal to one hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty; (b) on payment of the applicable tax and penalty equal to the fifty per cent of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty; (c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed: Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods. (2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances. (3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c). (4) No tax, interest or penalty shall be determined under sub- section (3) without giving the person concerned an opportunity of being heard. (5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded. (6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub- section (1) within fourteen days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130:

Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days may be reduced by the proper officer.

A close reading of the impugned order shows that immediately after noticing that a single consignment of 80 plywood sheets transporting under two invoices without e-way bill and also identifying it as fraud transaction in order to avoid e-way bills which are mandatory documents as per the CGST Act, the 3rd respondent by following the procedure contemplated under Section 129 (3) of CGST Act has issued the notice to the petitioner. Even the counsel for the petitioner also admits that the petitioner was transporting the goods without e-way bills, which will attract the provisions of Section 129 (1) (a), which ordains 100% penalty leviable on the value of goods, but pleads indulgence as imposing 100% penalty is on a higher side. As we are of the considered view that the order passed the 3rd respondent is legally sustainable & in accordance with law, which is not disputed the same warrants no interference by this Court.

Accordingly, the writ petition is dismissed, leaving it open for the petitioner to avail the remedies available to him. No costs.

As a sequel, all the pending miscellaneous applications are closed. ________________________ C.PRAVEEN KUMAR, J

___________________________ LALITHA KANNEGANTI, J Date: 07.08.2020

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THE HON’BLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HON’BLE SMT. JUSTICE LALITHA KANNEGANTI

WRIT PETITION No.12276 of 2020 (Per Lalitha Kanneganti, J)

Date: .08.2020

PVD