Emgee Enterprise And Anr vs. Asst Commisssioner Of State Tax Bureau Of Investigation South Bengal And Ors
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The appellants, Emgee Enterprise & Anr., filed an intra-Court appeal against an order dated July 18, 2022, which upheld a previous order dated December 22, 2021, passed by the Assistant Commissioner of State Tax, Bureau of Investigation (South Bengal). The initial order levied tax and penalty on 40 cases of deodorant seized from a transporter's godown, M/s. Shivan Rail Logistic, on the grounds that the appellants could not produce documentation for the goods. The appellants claimed they had purchased 300 cases from Mumbai, with 260 cleared and 40 remaining due to storage constraints. The appellate authority rejected their appeal, citing an expired E-way bill, the transporter's godown not being a notified additional place of business, and a discrepancy in the quantity of goods.
Held
The Court held that the issues raised, concerning the E-way bill validity, the status of the transporter's godown, and the quantity discrepancy, were complicated factual matters disputed by the revenue. These could not be adjudicated in a writ petition. Consequently, the Court decided to grant the appellants one more opportunity to present their case before the appellate authority. This opportunity was made conditional upon the appellants paying 90% of the disputed tax amount, quantified at Rs. 62,208/-, within three weeks. Upon compliance, the goods were to be released, and the appellate authority was directed to conduct a de novo consideration of the appeal, affording the appellants a personal hearing, examining their documents, and summoning the transporter for disclosure, before passing a fresh order on merits, uninfluenced by previous findings. The ratio decidendi is that complex factual disputes, particularly those involving tax and penalty, may warrant a de novo adjudication by the appellate authority when the writ jurisdiction is invoked due to the absence of a functional tribunal, subject to stringent conditions.
Key Issues
1. Whether the expiry of the E-way bill should be held against the appellants, considering Rule 138(5) of the W.B.G.S.T. Rules, 2017, if the distance between the transporter's godown and the appellants' godown is less than 50 kilometers? The appellants argued that this rule provides an exception. The revenue contended that the E-way bill had lost its validity. 2. Whether the transporter's godown, not being a notified additional place of business, can be a ground for penalizing the appellants? The appellants submitted that notifying a transporter's godown as an additional place of business is a cumbersome procedure. The revenue argued that the godown was not a declared additional place of business. 3. Whether there was a discrepancy in the quantity of goods seized? The appellants contended that their records would show no discrepancy and that the transporter could be summoned to clarify quantities. The revenue maintained that the quantity did not match the documents produced by the appellants.
Sections Cited
Rule 138(5)
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Cause title — parties, addresses and appearances
JUDGMENT (Judgment of the Court was delivered by T.S. SIVAGNANAM, J.)
This intra Court appeal is directed against the order dated 18th July, 2022 in W.P.A. No.13041 of 2022 filed by the appellants/writ petitioners. The writ petition was filed challenging the order passed by the Joint Commissioner of Revenue, Kolkata South Circle, who is the appellate authority under the provisions of the West Bengal Goods and Services Tax Act, 2017. The appellants had filed the said appeal before the appellate authority challenging the order of the Assistant Commissioner of State Tax, Bureau of Investigation (South Bengal) Headquarters dated 22nd December, 2021. The appellate authority has rejected the appeal. Since there is no tribunal functioning as on date, the appellants having left with no other remedy, had filed the writ petition challenging the order passed by the appellate authority.
The issue pertains to removal of 40 cases of deodorant, which the appellants had purchased from Mumbai which, according to the appellants, stored in the transporter’s godown, viz., M/s. Shivan Rail Logistic. The case of the appellants is that they had purchased 300 cases of deodorant from Mumbai of which 260 cases were removed from the godown of the transporter and 40 cases were remaining in the godown of the transporter as the appellants did not have the sufficient space to store them in 2
their godown. At that juncture, the Bureau of Investigation had intervened, which ultimately has resulted in an order dated 22nd December, 2021 passed by the Assistant Commissioner of State Tax, South Bengal. On perusal of the order, we find that the authority had levied tax and penalty solely on the ground that the appellants were not able to produce any document in respect of the seized goods. Before the appellate authority, the appellants had submitted certain documents and sought to establish their case. The appellate authority has essentially rejected the appeal on three grounds. Firstly, the E-way bill has lost its validity. Secondly, the transporter’s godown was not notified / declared as an additional place of business of the appellants. Thirdly, the quantity of the imported goods as could be seen from the documents produced by the appellants did not match with the total quantity.
The appellants’ case is that if the distance between the transporter’s godown and the appellants’ godown is less than 50 kilometers in terms of Rule 138 (5) of the W.B.G.S.T, Rules, 2017, this embargo of the e-way will having been expired, cannot be put against the appellants. On the second ground, it is submitted that the transporter’s godown cannot be notified as an additional place of business of the appellants as it is a 3
cumbersome procedure and seldom the transporters will agree for such a course of action.
With regard to the discrepancy in the quantity, the appellants’ case is that if the records are produced, it will clearly show that there is no discrepancy and in this regard the transporter can also be put on notice to disclose as to the total quantity, which was received in their godown, the quantity cleared and the quantity which is remaining.
In our considered view, all these issues are complicated factual issues, which are being disputed by the revenue. In any event, this cannot be adjudicated in a writ petition. Thus, considering the peculiar facts and circumstances of the case, we are of the view that one more opportunity can be granted to the appellants to go before the appellate authority to substantiate and establish that three grounds, which have been held against them are not made out. However, such opportunity shall be subject to stringent conditions.
In the light of the above observations, we are of the view that the writ petition itself could be disposed of along with this appeal. In the light of the above, the appeal and the writ petition are disposed of by directing the appellants to pay the entire disputed amount of tax, which has been quantified at 4
Rs.62,208/- less 10% of the tax in dispute, which has already been paid within three weeks from the date of receipt of the server copy of this judgment and order.
If the appellants comply with such condition, the respondent authorities are directed to release the goods within three days from the date of such payment after which the appellate authority shall take up the appeal petition for de novo consideration after affording an opportunity of personal hearing to the appellants or their authorised representative, peruse the documents that they may produce, issue notice to the transporter to appear in person and disclose all documents in their possession and thereafter pass fresh orders on merits and in accordance with law without being in any manner influenced by the observations and findings recorded by the appellate authority in the order dated 30th May, 2022. 8. The appellants are directed to cooperate in the expeditious disposal of the appeal petition, which has been directed to be considered by way of de novo adjudication.
Accordingly, the appeal and the writ petition stand disposed of.
There shall be no order as to costs. 5
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,
(PRASENJIT BISWAS , 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.