SHARE

| Sep-17-2021

Tax authorities to detain goods only in the case of deliberate tax evasion and not for technical or minor defects

In NE Equipment Solution Pvt. Ltd. v. The State of Tripura and Others [WP(C) No. 577/2021 dated August 24, 2021], NE Equipment Solution Pvt. Ltd. (“the Petitioner”) approached the Hon’ble Tripura High Court primarily for release of the machinery which was intercepted by the GST authorities on the ground that the driver did not have valid e-way bill for the machinery being brought within the State.

Further, the Superintendent of Taxes, Churaibari Enforcement Wing issued a show-cause notice dated August 19, 2021 ("SCN”) to the Petitioner under Section 129(3) of the Central Goods and Services Tax Act, 2017 ("CGST Act) and the State Goods and Services Tax Act, 2017 ("SGST Act) imposing penalty of Rs. 17,87,796/- on the Petitioner.

The Hon’ble Tripura High court held that the machinery should be released as the validity of the E-way bill expired on account of unforeseen and unexpected delay in crossing the check post since the transport department stopped the movement of the vehicle on the ground that the machinery was not registered in the State of Tripura and GST department imposed a fine of Rs.10,000/- which the Petitioner paid. This process, however, took more than 24 hours and in the meantime, the validity of the e-way bill expired. Though the Petitioner generated a new e-way bill, the GST department of the State was not prepared to accept it.

Further, added that detaining such machinery at the check post would expose it to deterioration particularly in the present season of heavy rainfall. The purchaser of the vehicle would also suffer gross inconvenience because having paid more than fifty lakhs of rupees for the purchase of the machinery he would not get the delivery of it for an indefinite period of time.

Moreover, the tax authorities must make a clear distinction between deliberate tax evasion and technical or minor defects which manifest no intention to evade tax. When the IGST liability has been fully discharged, no intention can be attributed on part of the Petitioner to evade tax.

Directed:

  • GST Department to release the transport vehicle and the machinery.
  • The Petitioner to file an undertaking before the Court to the effect that if any tax or penalty liability is crystallized upon final assessment subject to right of appeal and further challenge, the Petitioner shall deposit the same with the Government revenue.
  • The Petitioner to reply to the SCN till September 10, 2021
  • The Assessing Officer to pass final order of assessment in connection with the SCN bearing in mind the observations made in this order.

Online GST Course by Bimal Jain

Recorded: Certified Advanced GST Course

Course Details: Certificate of Participation will be Provided, Free GST Updates on E-mail, WhatsApp, Telegram for 1 Year, Background Material and PPT will be Provided on the downloadable basis, Total 21 Recorded Sessions (60 Hours), will be available for 120 hours or 60 Days whichever expires earlier.

For Registration:- https://cutt.ly/hxjl5Cu

Recorded: GST Course on Exports, Deemed Exports, SEZ, Imports, Merchandise Exports, Inverted Duty Structure (including Refunds)

Course Details: 6 Online Recorded Sessions of 2.30Hrs each with Background Material (BGM)

For Registration:- https://cutt.ly/pvw7mzl

For more details,
Call:
+91-8076563802 | E-mail: intern@a2ztaxcorp.com | Web: www.a2ztaxcorp.in

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.

Similar reads

Transfer Petition challenging Constitutional Validity of Section 16(2)(c) dismissed by Supreme Court

In Union of India v. M/s Cummins Technologies India Pvt Ltd and Ors etc. [Transfer Petitions(Civil) Nos.1481­-1482/2021 dated September 20, 2021] , the current transfer petitions have been filed

Sep-17-2021

Read More

Rejection of bid in absence of GST registration cannot be termed as arbitrary as tender was for taxable supplies

In M/S. ASR Hospitals (India) Pvt. Ltd. v. State of Andhra Pradesh and Ors. [W.P. No. 17415 of 2021 dated September 22, 2021], Andhra Pradesh Medical Services Infrastructure Development Corporation

Sep-17-2021

Read More

Orissa HC revokes GST Registration Cancellation on failure of Dept. to prove wrongful availment of ITC on fake invoices

In M/S. Bright Star Plastic Industries v. Additional Commissioner of Sales Tax [W.P. (C) No. 15265 of 2021 dated October 04, 2021], M/S. Bright Star Plastic Industries ("the Petitioner") has filed

Sep-17-2021

Read More

Order of Preventive detention not sustainable on grounds of stale and illusory

In Naveen Kasera alias Naveen Agarwal v. Union of India Secretary Ministry of Finance W.P.(CRL) 630/2021 dated September 30, 2021] the current writ petition has been filed by Naveen Kasera alias

Sep-17-2021

Read More

Mere dispatch of Order does not imply the service and receipt of Order

In M/S. Ghadshyam Enterprises v. Commissioner Central Goods & Services Tax [Service Tax Appeal No. 50783 of 2020 (SM) dated August 18, 2021], M/S. Ghadshyam Enterprises ("the Appellant") filed

Sep-17-2021

Read More