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IN THE HIGH COURT OF KERALA AT ERNAKULAM
DINESH KUMAR SINGH, J.
Philips Carbon Black Limited – Petitioner
Versus
State of Kerala – Respondent
W.P. (C) No. 19058 of 2018
Decided On : 16-11-2023
Central Goods and Services Tax Act, 2017 - Section 149, 143 - Kerala Goods and Services Tax Act, 2017 - Integrated Goods and Services Tax Act, 2017 - Section 10(1)(b) - Consignment - Place of supply - Proceedings are without jurisdiction - Writ petition challenging proceedings initiated under Section 149 of CGST Act, 2017 on ground that proceedings are wholly without jurisdiction and without authority of law - When goods were accompanied with other required documents such as invoices etc. itself would not be sufficient that supply was in violation of provisions of Act and Rules.
Findings of the Court:
Place of supply is in state of Tamil Nadu but delivery of goods is within State of Kerala - Goods of petitioner were not intercepted for non-generation of KER-1 and was not part of Ext.P4 notice - Only allegation was that petitioner had charged IGST instead of CGST and SGST - Respondents did not have jurisdiction and they assumed jurisdiction which was not vested in them for issuing Ext.P4 notice and Ext.P8 order, Court find whole proceedings without jurisdiction and therefore, argument of learned Government Pleader that petitioner has approached this Court at stage of issuing show cause notice and writ petition should not be entertained, does not require much consideration - Impugned proceedings are hereby set aside.
Result: Writ petition allowed.
JUDGMENT :
DINESH KUMAR SINGH, J.
1. The petitioner, a dealer under the provisions of the Central Goods and Services Tax Act and Kerala Goods and Services Tax Act, 2017, has filed the present writ petition challenging the proceedings initiated under Section 149 of the CGST Act, 2017 on the ground that the proceedings are wholly without jurisdiction and without the authority of law.
2. The petitioner has challenged Ext.P8 communication whereby the petitioner has been intimated by the 2nd respondent in response to the letter of the petitioner dated nil that since the destination of the transport is Kannur in Kerala, therefore, the supply being a taxable supply, SGST component of the GST is creditable to Kerala State. It is also stated in the said communication that if supply is not a taxable supply, for job work as claimed by the petitioner, the supplier should issue the supply documents (Delivery challan), the details of which have to be reflected in the accounts records of the consignee. Without this supply document, the nature of supply, the accountability of the transaction and also the further movement of goods at the hands of the consignee cannot be monitored by the department. In the absence of an online declaration like KER -1, E way bill etc. the monitoring of the further movement of the goods becomes more difficult.
3. It is stated that the breach of the rule has taken place inasmuch as the supply documents that caused the movement of the goods to the destination was not carried by the conveyance, and this contravention of the provisions of the Act requires the inspecting officer to issue notice under Section 129(3) of the GST Act for which the notice has already been issued and the goods would be released as per the law.
4. The petitioner is engaged in the manufacture and sale of Carbon Black. They transported one consignment of Carbon Black based on Ext.P5 purchase order of MRF Limited, Arakonam, in the State of Tamil Nadu hereinafter referred to as buyer/principal. It is stated that the buyer had instructed the petitioner to deliver the goods to its job worker M/s. Carbomix Polymers (India) Pvt. Limited, Kannur, in the State of Kerala. The said consignment was accompanied by Ext.P1 invoice. The invoice would mentioned the name of the buyer in the consumer name column and details of job worker were mentioned in the consignee name column.
5. The goods were intercepted by the 3rd respondent on 27.02.2018 in the morning at 08.30A.M when the transport reached Kozhikode, on the way to the place of job worker at Kannur, and Ext.P3 detention order was issued. Simultaneously, Ext.P4 notice under Section 129(3) of the CGST/KGST was issued. Ext.P4 notice mentions the reason that the place of delivery of goods being at Kannur in the State of Kerala, the CGST and SGST should have been charged in the invoice but Ext.P1 invoice was issued charging only IGST. This was treated as the contravention of the provisions of the Act, and Section 129 was invoked against the petitioner by the 3rd respondent. The reason for intercepting the goods as mentioned in Ext.P4 notice would read as under:-
6. The petitioner filed objection to
Section 143 of CGST Act prescibes procedure for job work.
Minor documentation discrepancies do not imply intent to evade tax, and valid transport documents render penalty imposition inappropriate.
Transactional value under Section 15 of the GST Act must be the decisive element for tax liability, and arbitrary assumptions regarding pricing or profit margins are impermissible.
The court ruled that GST does not apply to services executed outside India, affirming that a fixed establishment in another country qualifies for favorable tax treatment under Indian law.
The court ruled that GST does not apply to services executed outside India's territory, affirming that the taxpayer's activities in Maldives constituted a fixed establishment subject to local laws.
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