Iqbal Fertilizers,Chittoor vs. The Deputy Asst Commissioner(St)A.P,And 2 Others

Held

The Court held that the petitioner was not entitled to the relief of invalidating the confiscation proceedings and demand for tax and penalty at this stage. It reasoned that it was not pleaded that Respondent No.2 lacked jurisdiction to initiate proceedings, and the question of whether the consignment was supported by tax invoices needed to be decided in the proceedings before Respondent No.2. Therefore, the Court was not inclined to interdict those proceedings. Regarding the seizure of pesticides, which had been detained since 02.10.2017, the Court opined that the ends of justice would be met by releasing the seized pesticides to the petitioner. This release was made conditional upon the petitioner depositing the tax component of Rs.16,668/-, excluding the penalty. This deposit would be subject to the final outcome of the proceedings pending before Respondent No.2. The Court did not expressly leave any issue undecided, but the core dispute regarding the validity of the seizure and confiscation was deferred to the statutory authority.

Facts

The petitioner, M/s Iqbal Fertilizers, a registered dealer, purchased pesticides worth Rs.1,04,067.80 (including SGST and CGST) from dealers in Kurnool and Nellore. The consignment was transported by Navatha Transport. The petitioner sent its vehicle and driver to Piler to take delivery. Due to an emergency involving the driver's mother, the driver diverted the vehicle, carrying the consignment, towards Palamaner instead of the petitioner's business premises. Respondent No.1 intercepted and seized the vehicle and pesticides. Subsequently, a detention notice was issued on 02.10.2017, followed by a show cause notice on 03.10.2017 and a revised show cause notice on 16.10.2017 by Respondent No.2. The revised notice proposed confiscation of the pesticides valued at Rs.1,85,196/- under Section-130(1) of the Andhra Pradesh Goods and Service Tax Act, 2017, and offered release upon payment of a fine of Rs.83,340/-, along with tax of Rs.16,668/- and penalty of Rs.16,668/- under Section-130(3).

Key Issues

1. Whether the action of Respondent No.1 in seizing the pesticides and Respondent No.2 in initiating confiscation proceedings is illegal and arbitrary, warranting a writ of mandamus to declare it so and to release the seized goods and drop further proceedings, as argued by the petitioner? 2. Whether the consignment was adequately covered by tax invoices, which the driver allegedly showed to the detaining authority, despite which the seizure occurred, as contended by the petitioner? 3. Whether the driver of the vehicle failed to produce the prescribed statutory records under Section-68 read with Rule-138 of the Act, as argued by the respondents?