IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF OCTOBER 2019 BEFORE THE HON'BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.50086 OF 2019 (T-RES) BETWEEN:
M/S KESAR FARM A PROPRIETORSHIP FIRM HAVING ITS ADDRESS AT KHEDULYABERA, VILLAGE PADAMPURA, OFF PUSHKAR BYEPASS AJMER-305004. RAJASTHAN.
REP. BY ITS PROPRIETOR SHRI SHIVLEHRI SHARMA, S/O KEDARLAL SHARMA ...PETITIONER (BY SRI: CHETAN PANDYA AND SRI: SANTOSH RAJ URS, ADVOCATE) AND:
1 . THE ADDITIONAL COMMISSIONER OF COMMERICAL TAXES (ENFORCEMENT) SOUTH ZONE, VANIJYA THERIGE KARYALA-2, KORAMANGALA, RAJENDRANAGAR, BENGALURU-560047 2 . THE COMMERCIAL TAX OFFICER(ENF)-04 SOUTH ZONE-4, VANIJYA THERIGE KARYALA-2, KORAMANGALA, RAJENDRANAGAR, BENGALURU-560047 (BY SRI: VIKRAM, HCGP) …RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF DEMAND OF TAX AND PENALTY U/S 129(1)(b) OF CGST AND KGST ACT R/W SECTION 20 OF IGST ACT DATED 15.10.2019 PASSED BY R.2 AS PER ANNEXURE-S AND THE DETENTION ORDER DATED 23.09.2019 PASSED U/S 129(1) OF CGST ACT R/W SECTION 20 OF IGST ACT IN GST MOV-06 AS PER ANNEXURE-J AND THE NOTICE FOR TAX AND PENALTY ISSUED BY THE R.2 U/S 129 (1)(b) OF CGST AND KGST ACT R.W SECTION 20 OF IGST MOV-07 DT. 1.10.2019 AS PER ANNEXURE-P AND ETC.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R The petitioner has assailed the order of demand of tax and penalty under section 129(1)(b) of the Central Goods and Service Tax Act, 2017 (“CGST Act” for short) and, the Karnataka Goods and Service Tax Act, 2017 (“KGST Act” for short) read with section 20 of the Integrated Goods and Service Tax Act, 2017 (“IGST Act” for short) as well as the detention order dated 23.09.2019 passed under section 129(1) of CGST Act read with section 20 of IGST Act and the demand notices inter alia seeking for other consequential reliefs.
2. The petitioner is claiming to be a proprietorship firm engaged in the business of agriculture and trade of areca nuts and other agricultural products in the State of Rajasthan. It is submitted that the petitioner Firm consigned 21,000 Kgs., of areca nut to M/s.Nirman Enterprises of New Delhi having GSTIN No.07AFGPJ3277H1ZD under the cover of invoice No.KF/015 dated 18.09.2019 accompanied by E-way bill 781093157467 dated 18.09.2019. It is submitted that M/s.Phoenix Aromas India Pvt. Ltd., had supplied areca nut through Bahubali Transport Company of Bangalore. The goods in consignment was insured with M/s.Bharti AXA. The E-way bill was generated under “Bill to - Ship to”
mode and consigned under “Bill from – Dispatch from” category in vehicle truck bearing No.HR.55.AD.4490 on 18.09.2019 from Vellore in Tamil Nadu to Saroop Nagar in New Delhi. The said vehicle was intercepted by the second respondent on 19.09.2019 near Madadakere, Hosadurga – Hiriyur Road (TH Road) in Karnataka at 9.30 a.m. It is the contention of the petitioner that despite the compliance with the provisions of CGST Act/KGST Act 2017, the proper officer/respondent No.2 has issued Form GST MOV-2 after having formed a prima facie opinion that, (a) the documents tendered are defective;
(b) the genuineness of the goods in transit/quantity, quality and/or on tendered documents requires further verification.
Finally, the order under section 129(1)(b) read with section 6 of the CGST Act 2017/under section 129(1)(b) read with section 6 of the KGST Act 2017 dated 15.10.2019 has been passed. Being aggrieved, the petitioner is before this court.
3. Learned counsel Sri.Chetan Pandya appearing for the petitioner would submit that the petitioner being the owner of the goods detained by the respondent No.2 has made the payment equal to 100% of the tax payable on such goods. Hence, the respondent No.2/Authority ought to have passed the order under section 129(1)(a) of the CGST Act and KGST Act. It was contended that in terms of the Circular No.76/50/2018-GST dated 31.12.2018, if the invoice or any other specific document is accompanying the consignment of goods, then the consignor or the consignee should be deemed to be the owner. Admittedly, the invoice and E-way bill were accompanying the consignment of goods in question wherein the petitioner is shown as the consignor. As such, it was mandatory on the part of the respondent No.2 to consider the petitioner as “the owner of the goods” for the purpose of section 129(6) of CGST Act and the penalty, if any, ought to have been passed under section 129(1)(a) of the CGST/KGST Act. Reliance is placed on the order of the Division Bench in Writ Appeal Nos.2939-2940/2019 dated 13.08.2019 in the case of M/s.RAJ ENTERPRISES vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (ENFORCEMENT), CHALLAKERE and the order of this court in the case of SHREE ENTERPRISES vs. COMMERCIAL TAX OFFICER, SHIVAMOGGA reported in 2019 (25) G.S.T.L. 3 (Kar.). It is also submitted that other High Courts have also taken a similar view.
4. Learned HCGP appearing for the Revenue justifying the impugned orders/notices would submit that the order impugned is appealable. No writ petition is maintainable circumventing the alternative and efficacious remedy of appeal available under the statute. It is further submitted that investigation made by the authorities reveals that the vehicle (conveyance) in question did not enter into State of Tamil Nadu and the goods were not loaded in Tamil Nadu. Indeed the goods were loaded in the State of Karnataka near Aldur, Chikkmagalur District. In such circumstances, the owner/supplier of the goods in the State of Karnataka ought to have raised the tax invoice, collected the output tax which is payable to the State of Karnataka. Learned counsel has referred to section 2(66) and 31 of the CGST/KGST Act to contend that the tax invoice accompanied with the goods was not in conformity with the provisions of the Act.
5. The arguments advanced by the learned counsel for the petitioner inasmuch as the provisions of section 129(1)(b) read with Circular dated 31.12.2018, placing reliance on the judgments of this Court and various High Courts no doubt is broadly acceptable on the question, who has to be considered as “the owner of the goods” for the purpose of section 129(6) of CGST/KGST Act. It is not in dispute that either the consignor or consignee should be deemed to be the owner if the invoice or any other specified document is accompanying the consignment of goods provided the invoice is genuine and in accordance with the provisions of CGST/KGST Act.
6. Section 2(66) of the CGST/KGST Act defines as under:
2(66) “Invoice” or “Tax Invoice” means the tax invoice referred to in section 31.
Section 31(1) of the CGST/KGST Act reads thus:
31. Tax Invoice.- (1) A registered person supplying taxable goods shall, before or at the time of,— (a) removal of goods for supply to the recipient, where the supply involves movement of goods; or (b) delivery of goods or making available thereof to the recipient, in any other case, issue a tax invoice showing the description, quantity and value of goods, the tax charged thereon and such other particulars as may be prescribed:
7. The invoice accompanying the goods in the present case indicates the consignor as the petitioner. In terms of the investigation report, the goods are loaded in the State of Karnataka near Aldur, Chikkmagalur District and the conveyance in question has not entered into the State of Tamil Nadu. These factual aspects which are disputed and challenged by the petitioner cannot be adjudicated in the writ jurisdiction. The disputed facts, as observed by the Division Bench in M/s.Raj Enterprises, referred to supra, requires to be considered by the concerned Appellate Authority as to whether the petitioner can be treated as the owner in the light of the circular dated 31.12.2018 and whether release of the detained goods can be permitted upon the petitioner having paid 100% tax payable on such goods. It is trite that this court cannot adjudicate upon the disputed facts when the statute provides the mechanism for redressal of grievance.
8. Though an attempt has been made by the learned counsel for the petitioner to contend that the order impugned is not appealable under the provisions of the Act, the same requires to be negated for the reason that section 107 of the Act explicitly makes it clear that, any person aggrieved by any decision or order passed under the Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. It is further clarified by section 121 which deals with non-appealable decisions and orders. In terms of Section 121, no appeal shall lie against any decision taken or order passed by an officer of central tax if such decision taken or order passed relates to any one or more of the following matters, namely:— (a) an order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer; or (b) an order pertaining to the seizure or retention of books of account, register and other documents; or (c) an order sanctioning prosecution under this Act; or (d) an order passed under section 80.
It is not in dispute that the case on hand would not fall in any of the aforesaid clauses mentioned in section 121 of the Act.
9. Hence, without going into the merits or demerits of the case, this court finds it appropriate to relegate the petitioner to the Appellate Authority to avail the alternative remedy of appeal. If such an appeal is preferred within two weeks from the date of receipt of the certified copy of the order, the same shall be considered by the Appellate Authority on merits without objecting to the period of limitation and the decision shall be taken in an expedite manner, in any event, not later than four weeks from the date of filing of the appeal. All rights and contentions of the parties are left open.
Writ petition stands disposed of, in terms of the above.
Sd/- JUDGE Bss.