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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
KRISHNA S DIXIT, RAMACHANDRA D. HUDDAR, JJ.
The Joint Commissioner Of Commercial Taxes – Appellant
Versus
M/s. Transways India Transport No.3 Represented By Its Partner, Mr. Mohammed Mansoor - Respondent
Writ Appeal No. 854 of 2022 (T-RES)
Decided on : 24-06-2024
Taxation - Goods and Services Tax Act - Sections 129 - The court interpreted the provisions of the GST Act, particularly Section 129, emphasizing the right to movement and trade under Articles 19(1)(d) and 19(1)(g) of the Constitution, leading to the quashing of tax and penalty orders.
Fact of the Case:
The vehicle was intercepted while transporting goods without proper documentation, leading to tax and penalty orders under the GST Act. The respondent challenged these orders, claiming the route taken was not legally restricted.
Finding of the Court:
The court found that there was no law mandating a specific route for the transportation of goods, thus the authorities' orders imposing tax and penalty were unjustified.
Issues: Whether the authorities could impose tax and penalty for deviation from the specified route in the absence of a legal requirement to adhere to that route.
Ratio Decidendi: The court held that the right to choose a route for transporting goods is inherent in the right to trade and movement, and without a specific law regulating this, the imposition of penalties was unwarranted.
Result: The appeal was dismissed, upholding the learned Single Judge's order quashing the tax and penalty.
JUDGMENT :
This intra-Court Appeal seeks to call in question a learned Single Judge’s order dated 23.06.2022 whereby respondent’s W.P.No.7226/2022 (T-RES) having been favoured, the obligation to pay tax & penalty has been quashed coupled with a direction to release the vehicle in question.
2. Learned AGA appearing for the Appellants vehemently argues that the carrier of subject goods had furnished the movement particulars of the vehicle in advance in terms of lex mercatoria to the Department; goods carried in the conveyance originated from various consigners from Mumbai, consignees being in several places in Bengaluru city limits; however, the conveyance was intersected by the CTO at Bommasandra Industrial Area which is more than 20 kms away from the outer limits of City; thus, the goods conveyance having moved in a different direction altogether than was impressed to the department and the same being not authorized by the transit documents in question, the authorities rightly treated the case as one of ‘transportation of goods without documents beyond the place of destination and also diversion of the goods to a place other than the destination point’. He also tells that both the original authority & the Appellate Authority had looked into the matter and therefore, the same did not merit a deeper examination at the hands of learned Single Judge, scope of writ jurisdiction being restrictive.
3. Learned counsel appearing for the respondent makes submission in justification of the impugned order of the learned Single Judge and the reasons on which it has been structured. For him there was much scope for touching the final aspects of the matter, which we have deliberated on our own.
4. FACTS IN BRIEF:
a) The conveyance bearing Registration No.AP21- TY-3126 was intercepted by the CTO (Vig) on 2.12.2021 at Bommasandra industrial area more than 20 kms. away from the destination point namely Bengaluru city. The statement of its driver was recorded, goods in movement having been inspected. Particulars of the documents tendered by the driver showed that the goods were moving from Maharashtra to several places in Bangalore city and they do not mention anything about Bommasandra Industrial Area.
b) The CTO vide order dated 13.12.2021 observed as under:
6. Further verification of the tracking of vehicles in RF ID revealed the fact that the said conveyance has passed the Electronic City Toll Plaza on 02-12-2021 at 10.37 PM, which also proves that the goods conveyance was not moving toward the destination points as mentioned in the documents. And, present movement of goods and the conveyance are to be considered as moving without proper documents or with defective documents as prescribed under the provisions of the GST Act and Rules, 2017.
Both non-production of the required documents for the goods in transit or production of defective documents for verification at the time of check, leads to a clear contravention of the provisions of the GST Act and Rules, which attracts the levy of tax and penalty as provided under the provisions of sub-section (1) of Section 129 of the GST Act, 2017.”
(c) In view of the above, the CTO passed an order u/s 129(3) of the 2017 Act confirming the tax liability of Rs.3,25,423/- coupled with a penalty of Rs.21,41,239/- and directed the respondent to make the payment immediately. The respondent carried the matter in appeal at the departmental level and the same came to be nega
The right to choose a route for transporting goods is protected under constitutional rights to trade and movement, absent specific legal restrictions.
Minor deviations in transport routes without intent to evade tax do not warrant harsh penalties; authorities should impose general penalties for trivial lapses in compliance with the Goods and Servic....
Minor discrepancies in transport documentation do not warrant penalties under Section 129 of the Central Goods and Services Tax Act, with general penalties appropriately applied instead under Section....
Detention and seizure of goods in transit under GST requires clear evidence of contravention; mere discrepancies in documentation cannot justify such actions.
Minor errors in e-way bills do not justify detention under Section 129 of the CGST Act if the goods are otherwise properly documented.
The burden of proof lies with the petitioner to establish the genuineness of documents and actual movement of goods; failure to do so justifies seizure under the IGST/CGST Act.
Minor documentation discrepancies do not imply intent to evade tax, and valid transport documents render penalty imposition inappropriate.
For imposition of penalties under the GST Act, intent to evade tax must be established; mere expiration of documents does not suffice.
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