2023 (6) TMI 942 - CALCUTTA HIGH COURT

Seeking release of seized vehicle alongwith goods - it is alleged that document produced against the goods intercepted i.e. second hand car bearing Registration No. AS06AE2114 appeared to be invalid and incomplete based on the discrepancies - no E-way bill - HELD THAT:- The power of inspection, search and seizure can be carried out under Chapter XIV or in case of goods in transit under Section 129. On plain reading of Section 129 can be equated with the alternative dispute redressal mechanism and provides an opportunity to the owner of the goods or any other person to pay amount as specified under Section 129 (1) (a) or (b) or (c) of the said Act. Clause 129 (1) (a) of the Act which provides for payment of penalty equal to 200% of the tax payable on such goods or penalty equal to 50% of the value of the goods, further incorporates provision for determination of quantum of penalty under Section 129 (3), thus under the Scheme of the Act, the procedure for determination of tax and penalty is contained in Chapter XV read with Section 122, 123, 125, 126, 127 and 128 of the Act and a parallel procedure is prescribed under Section 129 of the Act in case of goods which are in transit.

In the present case, the respondents have proceeded to determine the tax liability as well as penalty only under the provision of Section 129 of the Act, which is not contemplated or intended. As per Section 129, there is no provision under Section 129 for determination of tax due, which can be done only by taking recourse of the provisions of Section 73 or 74 of the CGST Act as the case may be. Section 129, can be invoked by the respondent with regard to the goods in transit and the goods can be released only in the event the owner of the goods comes forward for payment of penalty as specified in Clause (a) (b) or (c) of Section 29 (1) of the Act.

In the present case, the petitioner has challenged the impugned order of penalty passed under Section 129 of the Act of 2017. On considering the submissions made by the respective parties and or perusal of the contents of the writ application, the Court finds the petitioner has challenged the jurisdiction, authority and the action of the respondent no. 2. This Court finds that a pure question of law relating to interpretation of Section 129 of the Act of 2017 as well as the other provisions of the Act are involved and the issue as to whether the valuation of the goods for imposing penalty CESS could be included or the penalty amount can be imposed on the basis of the margin of sale of second-hand car is in question - This Court is of the view that the issues involved in the present writ application required final adjudication after giving an opportunity to file affidavit. This Court also satisfied that the petitioner has made out a prima facie case for interim order as prayed for.

There will be an interim order to the extent that the respondent authorities shall release the vehicle of the petitioner in question on payment of the impugned demand in question excluding the CESS amount and for the CESS amount arising of the impugned demand, the petitioner shall furnish a bank guarantee subject to the satisfaction of the respondent authorities.

Let the matter appear under the heading hearing on completion of six weeks before the appropriate Circuit Bench.