Page 44 - GSTL_16 April 2020_Vol 35_Part 3

258 GST LAW TIMES [ Vol. 35
[Order per : M.S. Ramachandra Rao, J.]. - The petitioner herein is a pro-
prietary concern engaged in the business of Iron and Steel and is a registered
dealer on the rolls of the Hyderabad Rural STU-I, Centre Jurisdiction, Gajulara-
maram, Hyderabad (2nd respondent).
2. The petitioner was allotted GST No. 36AAMPA4421B2ZC.
3. The petitioner purchased goods from a dealer M/s. JSW Steel Lim-
ited, Vidyanagar, Karnataka vide Tax Invoice No. 19UJ2900401551, dated 11-12-
2019 valued at Rs. 3,52,920.74.
4. Against the said tax invoice under the Integrated Goods and Services
Tax Act (IGST), tax at 18% was levied coming to Rs. 63,526/-.
The plea of the petitioner
5. According to petitioner, when the consignment was coming from
Vidyanagar, Karnataka with all requisite documents through a vehicle bearing
No. KA 35 C 0141, it was detained at Jeedimetla at 05:30 p.m. on 12-12-2019, and
a notice under Section 129(3) of the CGST Act, 2017 (for short, ‘the Act’) was is-
sued alleging ‘wrong destination’ and directing payment of 9% of the Central Tax
and 9% of State Tax and penalty equal to tax estimating the purchase value of Rs.
11,14,579/- as against the actual tax invoice value of Rs. 4,16,447/-.
6. It is contended by the petitioner that since at that time the proprietor
of the petitioner could not contest it on account of there being a marriage in his
house on 12-12-2019 at Hyderabad, and since the driver of the vehicle was pres-
surizing for release of the vehicle, he was forced to pay the amount mentioned in
the notice dated 12-12-2019 issued by the 1st respondent.
7. 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 de-
tain the same and demand and collect the tax in the manner they have done
which is arbitrary and without jurisdiction.
8. It is also contended that the 1st respondent had no authorization as
contemplated under Section 67 of the Act read with Section 68 thereof and the
collection of taxes under both the Central and State Acts towards GST is arbitrary
and highhanded; that at best the 1st respondent can collect from the dealer a se-
curity equivalent to the amount payable under Clauses (a) or (b) in the manner
prescribed in Section 129(1) of the Act; and that the reason ‘wrong destination’
given by the respondents is not a good and sufficient reason for levying and col-
lecting tax and penalty from the petitioner and the detention of the goods and
the vehicle as well as collection of tax and penalty, is contrary to the provisions
of GST Act, 2017.
9. It is also contended that penalty cannot be levied unless there is will-
fulness and contumacious conduct of the dealer, and therefore, the petitioner
should be granted a refund of the amount of Rs. 4,16,447/- levied and collected
under both the Central Tax Act and the State Tax Act, 2017.
The stand of the 1st respondent
10. Counter-affidavit was filed by 1st respondent contending that there
was no pressure on the dealer to pay the tax and penalty; moreover a show cause
notice in Form MOV-07 was given and opportunity to file objections was also
given; and there was, therefore, compliance with principles of natural justice.
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