Industrial Pumps And Motors Agencies And Anr. vs. The Deputy Commissioner Of State Tax, Bureau Of Investigation And Ors.
Original PDF →Facts
The petitioners, Industrial Pumps & Motors Agencies, supplied goods to Durgapur Steel Plant, generating an e-way bill valid until midnight of May 8, 2022. Due to mechanical issues with their conveyance, the goods were delayed. Upon reaching DVC more at Durgapur, 10 kms from the destination, it was detected that the e-way bill had expired. The respondent authorities detained the conveyance and goods, citing the expired e-way bill as the sole reason. A report was prepared on May 10, 2022, followed by a detention order and a show cause notice under Section 129(3) of the GST Act. An order of demand of tax and penalty was issued on May 12, 2022. The petitioners paid the penalty and got the goods released, then filed an appeal under Section 107. They contend that since the order under Section 129(3) was not uploaded, they were compelled to file a physical appeal, and as they had paid 200% of the penalty, they were not required to deposit 25% of the penalty for filing the appeal.
Held
The Court held that the appellate authority's order dismissing the appeal was mechanical. While acknowledging that the amendment to Rule 108(1) of the WBGST/CGST Rules, 2017, which would have permitted manual filing in cases where the order under appeal was not uploaded, was introduced after the appellate authority's decision, the Court found that the appellate authority ought to have considered the petitioner's inability to file electronically due to the non-upload of the order. The Court reasoned that the petitioner was prevented from appreciating the order and filing electronically. Therefore, the appellate authority's order was set aside, the appeal was restored, and the matter was remanded back to the appellate authority for disposal on merits within 8 weeks. The Court did not expressly leave any issue undecided.
Key Issues
1. Whether the appellate authority erred in dismissing the appeal solely on the ground that it was filed manually, contrary to Rule 108(1) of the WBGST/CGST Rules, 2017, when the order under appeal was not uploaded electronically, thereby preventing the petitioner from filing electronically? (Question of law and mixed fact and law, turning on Section 107 and Rule 108(1)). Petitioner's arguments: The petitioners argued that the order under Section 129(3) was not uploaded, forcing them to file a physical appeal. They also contended that having paid 200% of the penalty as per Section 129(1)(a), they were exempt from the 25% penalty deposit requirement under Section 107(6) for filing the appeal. Revenue's arguments: The respondents argued that the appeal was filed manually, contrary to Rule 108(1). They also pointed out that the amendment to Rule 108(1) that would have accommodated such situations was introduced only on August 4, 2023, after the appellate authority's order.
Sections Cited
Section 129, Section 107, Rule 108(1)
AI-generated summary — verify with the full judgment below
2024 Item No. AD 7 Saswata
W.P.A. 14356 of 2024 Industrial Pumps & Motors Agencies & Anr. versus Deputy Commissioner of State Tax, Bureau of Investigation (South Bengal), Durgapur Zone & Ors. Mr. Ankit Kanodia Ms. Megha Agarwal Mr. Piyush Khaitan …For the petitioners Mr. A.Ray Ld. GP Mr. Md. T.M.Siddiqui Mr. S. Shaw Mr. S. Sanyal Mr. D. Sahu …For the State
The present writ petition has been filed challenging an order dated 5th June 2023 passed by the appellate authority under the provisions of WBGST/CGST Act 2017 (hereinafter referred to as the “said Act”).
The petitioner no. 1 is a partnership firm and is engaged in dealing in wide range of flow solutions, inter alia, including industrial duty pumps (hereinafter referred to as “goods”). In usual course of business the petitioner had supplied certain goods to M/s Durgapur Steel Plant which were covered by invoice dated 7th May 2022 and for the purpose of transportation, had generated an e-way bill dated 7th May 2022 at around 1.09 PM, which was valid till the midnight of 8th May 2022. 3. It is the petitioners’ contention that in course of movement, the petitioners’ conveyance developed some mechanical issues and was required to stop for few hours which led to the delay in transportation. Incidentally, when the aforesaid goods reached DVC more at Durgapur, Paschim Burdwan which is 10 kms away from the destination, since it was detected that the e way bills had expired, the conveyance in question which was carrying the said goods was prevented along with the goods from proceeding further by the respondent no.
This was 2 followed by a physical verification and a report to that effect was prepared on 10th May 2022. 4. It would appear from the said report that the only reason for which the goods had been detained was by reason of expiry of the e way bill. No other reason was pointed out. Subsequently, a detention order was also issued on 10th May 2022. The said order also recorded that the goods were not covered by valid documents. It is the petitioners’ contention that a show cause notice in Form GST MOV-07 dated 10th May 2022 was issued under Section 129(3) of the said Act. Following the aforesaid an order of demand of tax and penalty in Form GST MOV 09 dated 12th May, 2022 was issued. According to the petitioners, they had upon payment of the demand for penalty had got the goods released and thereafter, had filed an appeal under Section 107 of the said Act.
According to the petitioners inasmuch as the order passed under Section 129(3) of the said Act was not uploaded, the petitioners were compelled to file an appeal in physical form and could not do so electronically.
Mr. Kanodia, learned advocate appearing for the petitioners by referring to the document appearing at page 61 of the writ petition submits that upon presentation of the appeal from the order dated 12th May 2022 the respondents had acknowledgement the same. According to the petitioners since, the petitioners had already made a payment of 200 per cent of the penalty in terms of Section 129(1)(a) of the said Act, the petitioners at the time of filing of the appeal were not required to make deposit of 25 per
3 cent of penalty, as is required under Section 107(6) of the said Act.
It appears that the appellate authority by proceeding on the premise that the appeal had been filed manually contrary to the provisions of Rule 108(1) of the WBGST /CGST Rules, 2017 (hereinafter referred to as the “said Rules”), dismiss the said appeal.
Mr. Sanyal appears on behalf of the respondents.
Having heard the learned advocates appearing for the respective parties and having considered the materials on record, it would appear that admittedly the order passed under Section 129(3) of the said Act was not uploaded. As such, the petitioners, in my view, were prevented from preferring the appeal electronically. Having considered the 1st proviso to Rule 108 (1) of the said Rules, although, it appears that an amendment had been introduced in the rules to take into consideration an identical issue of this nature where the order under appeal had not been uploaded electronically, yet as pointed out by Mr. Sanyal, learned advocate appearing for the State that the said provision had been introduced only on 4th August 2023, i.e., after passing of the order which forms subject matter of challenge in the instant writ petition. As such it cannot be said that the appellate authority had passed a grossly illegal order, inasmuch as the amendment to Rule 108(1) first proviso was introduced later. However, in my view the appellate authority ought to have taken into consideration the fact that the petitioners were unable to appreciate the purport of the order in absence of the same being uploaded
4 and had thereby, been prevented from filing the appeal electronically. In this context, the order passed by the appellate authority appears to be a mechanical one.
In view thereof, the order passed by the appellate authority stands set aside, the appeal is restored and the matter is remanded back to the appellate authority. The appellate authority shall hear out and dispose of the appeal on merits within a period of 8 weeks from the date of communication of this order in accordance with law.
With the above observations and directions, the writ petition being WPA 14356 of 2024 is accordingly disposed of. All parties to act on the basis of the server copy of this order duly downloaded from this Court’s official website. (Raja Basu Chowdhury, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.