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SGST High Court Cases

GST - Scope of inquiry under Section 68 of the CGST Act by Anti Evasion Officer/ Check Post Officer or flying squad - scope of powers of the empowered officer while goods in transit – validity of inquiry into alleged wrongful availment of input tax credit conducted by Anti Evasion Officer or check-post incharge or flying squad, in exercise of powers under Section 68 of the CGST Act – HELD – if a Check Post Officer or Anti Evasion Officer intercepting the goods and vehicle while in transit, is permitted to carry on such fishing and rowing inquiry, it would impede, rather retard free flow of trade resulting in unnecessary and unwarranted harassment to the carrier of goods, so also to the consignor/consignee - all the documents prescribed under law were available and goods, including its weight, was found in order - genuineness of the goods in transit per se is not in dispute inasmuch as documents and e-way bill were found to be in accord - once the goods in question are in conformity with the documents of transit, the scope of inquiry under Section 68 of the CGST Act by Anti Evasion Officer/ Check Post Officer or flying squad ends. He cannot kick start an inquiry relating to the genuineness of purchase and corresponding input tax credit, which essentially relates to purchase of goods - The incident or occasion of availing input tax credit is an event preceding the transaction in question and completely divorced from the movement/transit of goods – respondent is directed to release the goods and vehicle in question forthwith, in case petitioner furnishes two solvent sureties – the respondent shall not insist upon furnishing of bank guarantee or cash security – matter is listed – ordered accordingly - Maintainability of writ petition – alternate statutory appellate remedy – HELD - Both the learned counsels have cited host of judgments, but none of them deal with the scope of provisions under consideration. The scope of provisions of Sections 67/68 & 129 of the Act, in the light of the facts like the ones at hands, has perhaps not been examined by any Constitutional Court. The assessees and the authorities under CGST/SGST/IGST are giving their own interpretation of the provisions of the Act relating to Goods in Transit - All stake holders are treading in the new GST regime with uncertainties as the path is comparatively unfamiliar, unmarked and unpaved. The parameters of the authorities’ powers and dealers’ duties / responsibilities / liabilities are yet to be demarcated – the impugned Notice is an example of such uncertainty. A perusal of the said notice issued in MOV-07 shows that respondent has jumped to propose penalty under clause (b) of Section 129(1)(a) on the pretext that as per petitioner, no-one has appeared for the owner of goods and proposed penalty as high as 50% of the value of goods. As against this, he was firstly required to propose penalty under clause (a) of Section 129(1), which would have been equal to the amount of tax. Given that the penalty under clause (a) would have been Rs.1,93,460/- and proposed penalty under clause (b) is Rs.10,74,780/-, in the opinion of the Court, the statutory remedies will be inefficacious. Even, remedy relating to release of goods under Section 129(1)(c) of the Act of 2017 would be illusory
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