ORDER :

Leave granted.

2. We have heard learned counsel for the parties.

3. The present appeal emanates from the final judgment and order passed by the learned Single Judge of the High Court at Calcutta (hereinafter referred to as the “High Court”) in Writ Petition bearing W.P.A. No.17452 of 2019 dated 2nd August, 2022 (hereinafter referred to as the “Impugned Judgment”), by which the said petition was dismissed.

BRIEF FACTS:

4. The appellant, being a company, carries on the business of horizontal directional drilling using trenchless methodology for underground utilities -oil/gas, telecom and power. The appellant functions as a contractor and is duly registered under the Central Goods and Services Act, 2017 (hereinafter referred to as the “CGST Act”) and the West Bengal Goods and Services Act, 2017 (hereinafter referred to as the “WBGST Act”). For many years, the appellant executed work contracts of the Gas Authority of India Limited (hereinafter referred to as “GAIL”), including work in the State of West Bengal for Dobhi-Durgapur Gas Pipeline Section. Prior to this, the appellant had executed work for GAIL in the State of Uttar Pradesh in Auraiya district.

5. Insofar as the execution of the work in Durgapur is concerned, on 30th May, 2019, the appellant availed of the services of M/s. Hariom Freight Carriers (hereinafter referred to as “HFC”) for mobilising one machine being XCMG HDD Machine XZ6600(hereinafter referred to as the consignment”)weighing approximately 68 tons from its previous/old work site at Auraiya, Uttar Pradesh to the new site at Durgapur, West Bengal. The said machine which is used for execution of works contracts by the appellant, who is its sole owner, is ‘capital goods’ as per Section 2(19) ¹[‘(19) “capital goods” means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business;’ ], CGST Act. The appellant complied with the provisions of the CGST Act relating to movement of capital goods, before initiating the movement from Auraiya, Uttar Pradesh to Durgapur, West Bengal by generating E-way Bill on 30th May, 2019, bearing No.791074700465 after paying the requisite tax amount required under the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the “IGST Act”).

6. The validity of the said E-way bill was till 9th June, 2019. As transportation was not done within the validity period of the E-way bill, finally the consignment was intercepted on 17th June, 2019 and upon inspection, an order of detention was issued by the respondent No.1, at the time of entering the State of West Bengal, under Section 129(1), CGST Act and Section 129(1), WBGST Act read with Section 20, IGST Act under Form GST MOV-06 No.703 dated 18th June, 2019. Pursuant thereto, the consignment as well as the vehicle carrying the same were detained by the respondent No.1.

7. Thereafter, the respondent No.1 issued a notice under Section 129(3), CGST Act and Section 129(3), WBGST Act read with Section 20, IGST Act, being Form GST MOV-07 No.712 dated 19th June, 2019, asking the appellant to show-cause, within seven days from the date of the receipt of the notice, as to why the proposed tax of Rs.54,00,000/-(Rupees Fifty four lakhs) and penalty of Rs.54,00,000/-(Rupees Fifty four lakhs) be not imposed, indicating that failure would lead to initiation of further proceedings under the provisions of the CGST, WBGST or IGST Acts. On 24th June, 2019, the appellant filed its reply. However, upon consideration of the reply filed by the appellant, on 27th June, 2019, an order of demand of tax and penalty under Form GST MOV-09 vide Order No.803 was passed by the respondent No.1 and the proposed tax and penalty in terms of the notice dated 19th June, 2019, was confirmed.

8. The appellant, aggrieved by the said demand order, preferred an appeal, against the same on 19th July, 2019 before the Appellate Authority,