S. S. Enterprises vs. Union Of INDIA

Held

The Court held that the proceedings under Section 130 of the CGST Act were still pending. Considering the petitioner's willingness to pay the tax and penalty under protest, the Court directed the release of the goods and the conveyance. The petitioner was ordered to deposit an amount of Rs. 39,672/- with the second respondent, which was computed by the respondent in the impugned notice dated 15.9.2019 issued under Section 130 of the CGST Act. This amount was to be treated as a deposit made under protest and would be subject to the final outcome of the proceedings under Section 130. The petitioner's right to challenge any adverse order in those proceedings was preserved. The ratio decidendi is that in cases of procedural lapses leading to detention, where the tax and penalty are acknowledged and willingness to pay is expressed, the goods and conveyance should be released upon payment of the determined amount under protest, pending final adjudication.

Facts

The petitioner, S. S. Enterprises, a proprietory concern dealing in metal scrap, was transporting 12 parcels of brass scrap valued at Rs. 3,77,601/- from Jaipur, Rajasthan to Jamnagar, Gujarat. During transit, due to a change in conveyance at Nathdwara, Rajasthan, a photocopy of the e-way bill and invoice was inadvertently not provided to the driver of the mini cargo carrying 4 parcels. On September 14, 2019, the conveyance was intercepted at Nana Chiloda, and the goods were detained and seized as the driver did not possess the required documents for the petitioner's goods. The following day, the respondent issued an order of detention under Section 129(1) of the CGST Act and a show-cause notice under Section 130, demanding Rs. 3,88,234/- towards tax, penalty, and fine. The petitioner responded, expressing willingness to pay tax and penalty under Section 129(1)(c) and requested the release of goods and conveyance.

Key Issues

1. Whether the detention and seizure of goods under Section 129 of the CGST Act, followed by a show-cause notice for confiscation under Section 130, are justified when the petitioner is willing to pay the tax and penalty leviable under Section 129(1)(c)? Petitioner's argument: The petitioner contended that the detention and subsequent proceedings were initiated due to an inadvertent omission of a photocopy of documents. They expressed willingness to pay the tax and penalty as per Section 129(1)(c) of the CGST Act and sought the release of the goods and conveyance. They relied on the principle that procedural lapses should not lead to undue hardship, especially when the tax liability is acknowledged and willingness to pay is expressed. Revenue's argument: The revenue, represented by the Assistant Government Pleader, did not explicitly record arguments in the judgment. However, their actions of detaining the goods and issuing the show-cause notice under Section 130 indicate their stance that the contravention warranted such proceedings.