Wrongful Detention – Tax not to be collected by Coercion
Case of Commercial Steel Company – Decision of Hon’ble Telangana High Court in the Writ Petition No. 2161 of 2020 Facts
Telangana High Court
Petitioner had purchased goods from JSW Karnataka and goods were destined for Hyderabad. Goods intercepted at Jeedimetla in Telangana and notice of detention alleging “wrong destination” issued under Section 129 (3) of CGST Act. Though the goods were accompanied by tax paid documents which reflected payment of IGST, demand made for payment of CGST + SGST. It is contended by the petitioner that since at that time the petitioner could not contest it on account of a marriage in the family, on 12.12.2019 at Hyderabad, and since the driver of the vehicle was pressurizing for release of the vehicle, Petitioner was forced to pay the amount mentioned in the notice.
The petitioner further contended that the said collection of tax and penalty by the respondents is through coercion and threat in spite of the fact that the consignment was covered by all the requisite documents. It is alleged that when the goods were in transit in an inter-State sale, the respondents cannot detain the same and demand and collect the tax in the manner they have done which is arbitrary and without jurisdiction.
Decision of the Hon’ble Court
The Hon’ble High Court held that –
• In our considered opinion, there were no good and sufficient reasons for detention by the 1st respondent of the vehicle and the goods which it was carrying when the transaction causing movement of the goods was inter-State in nature and the provisions of the SGST were not shown to have been violated. Also, there is no warrant to levy any penalty since it cannot be said that there is any wilfulness in the conduct of the dealer.
• It is settled law that no tax shall be levied or collected except by authority of Law as per Article 226 of the Constitution of India
• In Dabur India Ltd. vs. State of Uttar Pradesh1, the Supreme Court observed that a litigant cannot be coerced by the Government to make payment of duties which the litigant is contending not to be leviable. The Supreme Court held that though the State is entitled to enforce payment and to take all legal steps, it cannot be permitted to play dirty games with the citizens to coerce them in making payments when the citizens were not obliged to make them. It also observed that if any money is due to the Government it should not take extra legal steps to recover it.
• Therefore, in our considered opinion, the impugned action of the respondents in collecting the amount of Rs.4,16,447/- from the petitioner towards tax and penalty under the CGST and SGST Act, 2017 under threat of detention of the vehicle carrying the said goods for an absurd reason (‘wrong destination’) when the vehicle in question carried all the proper documents evidencing that it was an inter-State sale transaction is clearly arbitrary, violative of Articles 14, 265 and 300-A of the Constitution of India.
• The 1st respondent is directed to refund the same with interest at the rate of 6% per annum from 13.12.2019 till the date of payment within a period of three (03) weeks from the date of receipt of copy of the order.
Tags: Judgement, High Court, GST
You May Also Refer:
- Goods detained released on giving Bank Guarantee: HC
- GST: Time of supply of goods as per Model GST Law with Examples!
- Corporate Compliance Calendar for the Month of May 2020
- Claim of Cenvat credit was bogus where raw material purchased did not reach factory premises of assessee
- 24 FAQ’S ON SCOPE / ELIGIBILITY OF DIRECT TAX VIVAD SE VISHWAS ACT 2020
- No Service Tax on recovery of Cheque dishonor charges
- TDS on payment made to Foreign celebrity outside India by India Company
- COUNTER STROKE ON DARK SIDE OF E-COMMERCE (TAX EVASION)
- Webinar on Deeming Fiction in Income Tax Act by CA. Adv. Kapil Goel
- Rectification of GSTR-3B should be allowed very month in which error occured-HC
The post Wrongful Detention – Tax not to be collected by Coercion appeared first on Studycafe.
from Studycafe https://ift.tt/3ckxGlT
No comments:
Post a Comment