Sainath Metals And Alloys Private Limited vs. Union Of INDIA
Original PDF →Facts
The petitioner, Sainath Metals and Alloys Private Limited, engaged in a purchase transaction of HI Crome Scrap with B. N. Steel Traders, Raipur. During transit from Raipur, Chhattisgarh to Ahmedabad, Gujarat, the vehicle and goods were intercepted and detained. The grounds for detention were: (i) the transaction was inter-State, requiring IGST instead of CGST and SGST on the tax invoice, and (ii) a discrepancy between the delivery place mentioned in the E-way bill (Dudheshwar, Ahmedabad) and the tax invoice (Kubadthal, Daskroi). The matter was at the GST MOV 07 stage. The petitioner had filed a representation on March 9, 2022, explaining a clerical error in the invoice and the discrepancy in delivery locations due to having two registered places of business. The State Tax Officer had not yet decided on this representation.
Held
The Court noted that the goods and conveyance had been released. The petitioner's counsel confirmed this release. However, the petitioner's counsel raised a grievance regarding the prolonged detention of approximately 12 days, which resulted in the petitioner incurring demurrage charges of Rs. 65,000/-. The Court found this grievance to be well-founded and a matter of concern. Since the primary issue of detention was resolved by the release of the goods and conveyance, the Court deemed further adjudication of the writ application unnecessary. The writ application was accordingly disposed of. The Court did not explicitly decide on the legality of the initial detention or the merits of the tax and delivery discrepancies, as the matter was resolved by the release of the goods.
Key Issues
1. Whether the detention of goods and conveyance was justified based on the alleged discrepancy in tax charged (CGST/SGST vs. IGST) for an inter-State transaction, and the discrepancy in the place of delivery between the E-way bill and the tax invoice, considering the petitioner's explanation of a clerical error and multiple registered places of business. Petitioner's arguments: The petitioner argued that the discrepancy in tax was due to a clerical error and that the delivery location discrepancy was explainable by their having a principal place of business and an additional place of business. They contended that the goods and conveyance were detained for an unreasonable period of 12 days, leading to demurrage charges of Rs. 65,000/-, and that the State Tax Officer had not acted upon their representation. Revenue's arguments: The judgment records no specific arguments made by the revenue regarding the justification of detention or the merits of the petitioner's explanation.
Sections Cited
GST MOV 07
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Cause title — parties, addresses and appearances
ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
We have heard Ms. Vaibhavi Parikh, the learned counsel appearing for the writ-applicant and Mr. Utkarsh Sharma, the learned AGP appearing for the respondents.
On 15.03.2022 this Court passed the following order:- “1.
We have heard Ms. Vaibhavi Parikh, the learned counsel appearing for the writ applicant and Mr. Utkarsh Sharma, the learned A.G.P. appearing for the respondents Nos.2 and 3 respectively on an advance copy furnished upon him.
It appears from the materials on record that the writ applicant entered into a purchase transaction of HI Crome Scrap with one B. N. Steel Traders, Raipur. While the goods were in transit, the vehicle and the goods came to be intercepted and detained. The goods have been detained essentially on two C/SCA/5364/2022 ORDER DATED: 17/03/2022 grounds: (i) Since the goods were dispatched from Raipur, Chhatisgarh to Ahmedabad, State of Gujarat, the transaction could be said to be inter-State transaction and therefore, IGST should have been charged in the tax invoice and not the CGST and SGST; and (ii) in the E-way bill generated for the transaction in question, the place of delivery has been shown as the Dudheshwar, Ahmedabad. While in the tax invoice, the delivery location has been shown as Kubadthal, Daskroi. 3 The matter is at the stage of GST MOV 07. 4 It appears that the writ applicant has also filed a representation dated 9th March 2022 which has been annexed at page : 36 as Annexure : F pointing out that there is a clerical error in the invoice and as regards the discrepancy in the place of delivery, it has been pointed out that the writ applicant has two registered place in the GST. One is the principal place and the other one is additional place. It appears that although the representation is of 9th March 2022, the State Tax Officer has not yet looked into it and has not taken an appropriate decision. 5 Let Notice be issued to the respondents, returnable on 17th March 2022. No Notice now be issued by the Registry to the respondents Nos.2 and 3 as Mr. Utkarsh Sharma, the learned A.G.P. has already entered his appearance on behalf of the respondents. Mr. Sharma is requested to take instructions in the matter and revert to us on 17th March 2022. 6 On the next date of hearing, notify this matter on top of the Board.”
Today when the matter was taken up for further hearing, Mr. Utkarsh Sharma, the learned AGP made a statement that the goods and the conveyance have been released.
Ms. Vaibhavi Parikh, the learned counsel appearing for the writ-applicant confirms that the goods and the conveyance have been released. However, Ms. Vaibhavi Parikh has a serious grievance to redress. She submitted that for no good reason, the goods and the conveyance were kept under detention for almost a period of 12 days and her client had to pay an amount of C/SCA/5364/2022 ORDER DATED: 17/03/2022 Rs.65,000/- towards the demurrage charges to the transporter. The grievance of Ms. Parikh is well founded and is a matter of concern.
Since the goods and the conveyance have already been released, no further adjudication of the present writ-application is required. This writ-application is accordingly disposed of. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) A. B. VAGHELA
Reproduced from the public record of the Gujarat High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.