M/S Neuvera Wellness Ventures PVT LTD vs. State Of Gujarat

Held

The High Court quashed and set aside the impugned order dated 2.4.2019 and restored the matter to the file of the second respondent for fresh decision. The Court found the impugned order to be unreasoned and lacking in justification. It noted that the order did not deal with the petitioners' submissions regarding prior payment of IGST, movement from bonded warehouse to own godown, and the absence of a 'supply'. The Court emphasized that reasons are the heart and soul of quasi-judicial orders and their absence vitiates the order. However, considering the perishable nature of the goods, the Court directed their release subject to the petitioners furnishing security of Rs. 12,00,000/-. This security was for immediate relief and not an expression of opinion on the petitioners' liability. The second respondent was directed to pass a speaking order after considering all contentions.

Facts

The petitioners, M/s Neuvera Wellness Ventures Pvt Ltd, challenged a demand order dated 2.4.2019 passed by the State Tax Officer, Surat. The order demanded GST of Rs. 5,93,505/- and a penalty of Rs. 5,93,505/-. The goods, consisting of imported Whey Protein Powder, were detained and seized under Sections 129 and 130 of the CGST Act and related statutes. The detention occurred because Part-B of the e-way bills was not generated by the transporter due to a technical issue, despite Part-A being uploaded. The petitioners argued that IGST had already been paid on the imports at the customs stage, and the goods were being moved from a customs bonded warehouse to their own godown, thus not constituting a 'supply' under GST. They also contended that the goods were perishable and that the authorities should have considered them as exempted goods or accepted security.

Key Issues

1. Whether the demand order dated 2.4.2019, which levied GST and penalty, is sustainable in law, considering the petitioners' contention that IGST was already paid on imports and the movement was from a bonded warehouse to their own godown, thus not a 'supply' under the GST Act? 2. Whether the detention and seizure of goods were justified in the absence of Part-B of the e-way bills, especially for perishable goods? Petitioner's Arguments: - The petitioners argued that since IGST was already paid on the imports and the goods were moved from their bonded warehouse to their own godown, there was no 'supply' and therefore no GST liability arose. They contended that the demand for GST and 100% penalty was therefore incorrect. They relied on Section 129(1)(a) and (c) of the CGST Act, suggesting that if GST was not leviable, the penalty should be nominal (2% of value or Rs. 25,000) or security should be accepted. Revenue's Arguments: - The revenue supported the impugned order, arguing that the goods were detained and seized because they were not accompanied by Part-B of the e-way bills, constituting a contravention of the GST Act and rules. They contended that the petition was devoid of merit.