Bioveda Action Research Company vs. Commissioner, Central Goods And Services Tax And Anr

Held

The Court noted that at the time of arguments, both parties agreed that the goods had already been released. They further agreed that the issue of correct classification of goods could only be adjudicated by the Appellate Authority under Section 107 of the CGST Act. Consequently, the High Court disposed of the writ petition as infructuous. The Court granted liberty to the petitioner to file a statutory appeal before the Appellate Authority within 30 days of receiving a certified copy of the instant order. The respondents agreed not to raise the issue of limitation if the appeal was filed within this period. The Appellate Authority was directed to decide the appeal, if filed, within six months in accordance with the law.

Facts

The petitioner, Bioveda Action Research Company, a manufacturer of Ayurvedic products, had a consignment intercepted by a CGST Officer at Yamunanagar. The goods were detained under Section 129(1) of the CGST Act due to alleged wrong classification. A show cause notice was issued, followed by an order in original dated 3.5.2019, imposing tax, fine, and penalty on the petitioner and the transporter. The petitioner filed a writ petition challenging this order. The High Court, on 31.5.2019, directed the release of goods upon furnishing a bank guarantee of Rs. 38,47,504/-, subject to final adjudication. The matter was listed for further consideration.

Key Issues

1. Whether the Assistant Commissioner, Central Goods and Services Tax, Jagadhari, District Yamunanagar, had the jurisdiction to determine the rate of tax on the goods in transit, given the alleged wrong classification under Section 129(1) of the CGST Act? Petitioner's arguments: The petitioner contended that the detaining officer lacked jurisdiction to adjudicate on the rate of tax. They argued that tax at 12% was paid, but the authorities sought 18% plus penalty, instead of just the difference in tax rates. The goods were detained despite the tax payment and the petitioner's offer of a bank guarantee. Revenue's arguments: The respondents did not explicitly record arguments regarding jurisdiction. However, their actions in detaining the goods and issuing the order in original implied a contention that the detention and imposition of tax, fine, and penalty were justified under the relevant provisions.