K.D. Gupta And Anr vs. The Assitant Commissioner Of State Tax, And Ors
Original PDF →Facts
The appellants, K. D. Gupta & Company & Anr., are challenging an order of the Assistant Commissioner of State Tax, West Bengal. Their goods, intended for export, were intercepted on September 15, 2019, for not having a valid e-way bill. The appellants claim an e-way bill was generated later that day and communicated to the detaining authority. Despite this, the goods were seized, and a show cause notice led to an order imposing tax and penalty. An appeal before the first appellate authority under Section 107(1) of the West Bengal Goods and Services Tax Act, 2017, was rejected. The appellants then filed a writ petition, and being aggrieved by the Single Bench's direction to file an affidavit-in-opposition without granting interim relief, they filed this intra-court appeal. The High Court took up the writ petition for disposal along with the appeal.
Held
The Court held that the first appellate authority had not properly considered the appellants' arguments regarding the export nature of the transaction and the absence of wilful intent to evade tax. The Court found that if the transaction is indeed an export, no tax is leviable. Consequently, the conduct of the appellants in relation to the penalty under Section 129 of the Act should have been examined more thoroughly by both the adjudicating and appellate authorities. The Court decided to grant the appellants one more opportunity to demonstrate their bona fides. The order of the appellate authority dated November 30, 2021, was set aside, and the matter was remanded to the appellate authority for a fresh consideration. The appellants are to appear before the appellate authority, produce documents to establish their case that no tax is leviable and there was no wilful intention to evade tax, and be afforded a personal hearing. The appellate authority is directed to pass a reasoned order on merits within 12 weeks. The Court explicitly stated that it had not gone into the merits of the matter, leaving all issues for the first appellate authority to consider.
Key Issues
1. Whether the transaction being an export transaction exempts it from tax liability under the Act? 2. Whether the absence of a valid e-way bill at the time of interception constituted a wilful intention to evade tax, thereby attracting penalty under Section 129 of the Act? Appellants' Contentions: The appellants argued that as the transaction was for export, no tax was payable. They further contended that there was no wilful intention to evade tax; the delay in generating the e-way bill was due to the driver's lack of education and unfamiliarity with legal requirements. They relied on the principle that if no tax is leviable, the conduct of the appellants should be examined in the context of penalty imposition. Revenue's Contentions: The judgment does not record specific contentions from the revenue or State regarding these issues.
Sections Cited
Section 107(1), Section 129
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT (Judgment of the Court was delivered by T.S. SIVAGNANAM, J.)
Re: I.A. CAN 2 of 2022
This application has been filed to condone the delay of 16 days in filing the instant appeal.
We have heard Mr. Ankit Kanodia, learned counsel appearing for the appellants and Mr. Debasish Ghosh, learned Advocate for the State.
We are satisfied with the reasons assigned in the affidavit filed in support of the application. Accordingly, the delay in filing the instant appeal is condoned.
The application being I.A. CAN 2 of 2022 is allowed. Re: M.A.T. No.1479 of 2022 2
This intra Court appeal is directed against the order dated 25th July, 2022 in W.P.A. No.16047 of 2022 by which the learned Single Bench has declined to pass any interim order and directed affidavit-in-opposition to be filed by the respondents. Being aggrieved by such direction, the appellants are before us by way of filing this appeal. With the consent of either side, the writ petition itself is taken up for disposal along with this appeal.
As against an order passed by the Assistant Commissioner of State Tax, West Bengal, the appellants had filed an appeal before the first appellate authority under Section 107(1) of the West Bengal Goods and Services Tax Act, 2017 (for short, “the Act”).
The allegation against the appellants was that the goods which were meant for export were intercepted on 15th September, 2019 at about 8.35 a.m. and it was found the goods were not accompanied by the valid e-way bill. The appellants’ case is that at 10.47 a.m., the e-way bill was generated and it was made known to the detaining authority. Notwithstanding that, the said authority seized the goods and thereafter issued show cause notice and ultimately the order was passed imposing tax and 3
penalty against which the appeal was filed before the first appellate authority, which was rejected.
The case of the appellants is two-folds; firstly, the transaction being an export transaction, no tax is payable and secondly, there was no wilful intention on the part of the appellants not to generate any e-way bill but they would contend that it is actually the fault of the driver of the vehicle, who was uneducated and did not know about the legal position. Be that as it may, if the transaction is an export transaction, then no tax is leviable. Consequently, the conduct of the appellants could have been examined both by the adjudicating authority as well as by the appellate authority while imposing penalty under Section 129 of the Act.
On perusal of the order passed by the first appellate authority, we find that such exercise has not been done. Therefore, we are of the view that one more opportunity can be granted to the appellants to show their bona fides.
For the above reasons, this appeal as well as the writ petition are disposed of and the order passed by the appellate 4
authority dated 30th November, 2021 is set aside and the matter stands remanded to the appellate authority. The appeal shall stand restored in the file of the appellate authority and the appellants shall appear before the appellate authority and produce all documents to establish their case that no tax is leviable and there was no willful intention on their part to evade payment of tax so as to attract penalty, after affording an opportunity of personal hearing.
The appellate authority shall consider both aspects and pass a reasoned order on merits and in accordance with law as expeditiously as possible but preferably within a period of 12 weeks from the date of receipt of the server copy of this judgment and order.
We make it clear that we have not gone into the merits of the matter and all issues can be considered by the first appellate authority.
With the above directions, the appeal and the connected application being CAN 1 of 2022 are disposed of. 5
No order as to costs.
Urgent photostat certified copy of this order, if applied for, be furnished to the parties expeditiously upon compliance of all legal formalities.
(T.S. SIVAGNANAM, J) I agree,
(SUPRATIM BHATTACHARYA, J.) NAREN/PALLAB(AR.C) 6
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.