TMI Blog2018 (1) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules made there under with the intent to evade payment of tax. If that be so, mere infraction of the procedural Rules like Rules 55 and 138 of the State GST Rules cannot result in detention of goods, though they may result in imposition of penalty. The detention of goods merely for infraction of the procedural Rules in transactions which do not amount to taxable supply, is without jurisdiction. Petition allowed. - W. P. (C) No. 196 of 2018 - - - Dated:- 17-1-2018 - P. B. Suresh Kumar, J. JUDGMENT Petitioner is a public limited company engaged in the establishment and maintenance of towers for telecom service providers. They are registered under the Central Goods and Services Tax Act (the CGST Act) and the Kerala State Goods and Services Tax Act (the SGST Act). 2. It is stated by the petitioner that the materials procured by them for their use at the various tower locations in the State are being stored at their warehouses and the same will be transported to the various tower locations as and when required. On 7.12.2017, in terms of Ext.P1 GST tax invoice, the petitioner procured the batteries required for their various tower locations including Gandhi Nagar i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r only after the detention and therefore, the same cannot be accepted as a document in terms of the requirements contained in Rules 55 and 138 of the State- GST Rules. In other words, the stand taken by the first respondent in Ext.P6 communication is that the goods can be released only on payment of the tax and penalty claimed in terms of Ext.P3 notice. Ext.P3 detention notice and Ext.P6 communication issued by the first respondent are under challenge in the writ petition. 3. Heard the learned counsel for the petitioner as also the learned Government Pleader. 4. The learned counsel for the petitioner submitted that the only defect noted in the documents that accompanied the goods was absence of Form KER-1 declaration and that since Form KER-1 declaration was uploaded and made available to the first respondent immediately on receipt of notice, there is no justification for the continued detention of the goods. It was also contended by the learned counsel for the petitioner that the authenticity of the delivery chalan issued by the petitioner in the instant case is not disputed by the first respondent in Ext.P3 notice and therefore, the first respondent cannot be heard to conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. (3) Subject to the provisions of sub-sections (1) and (2). the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as- (a) a supply of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods. It is evident from the provisions contained in section 7 referred to above that only supplies made for consideration and the activities referred to in the identical entries contained in Schedule 1 of the statutes which are made or agreed to be made without consideration, would fall within the scope of supply. Schedule 1 referred to above reads thus: ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION. 1. Permanent transfer or disposal of business assets where input tax credit has been availed on such assets. 2. Supply of goods or services or both between related persons or between distinct p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and conveyances in transit. Sections 130 and 131 deal with confiscation of goods or conveyances and levy of penalty and Sections 132 to 138 deal with the various offences under the Act. Among the said provisions, Section 129 dealing with detention, seizure and release of goods and conveyances in transit, reads thus 129. Detention. seizure and release of goods and conveyances in transit. (1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made there under, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure. shall be released,- (a) on payment of the applicable tax and penalty equal to one hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for registration; or (iv) contravenes any of the provisions of this Act or the rules made there under with intent to evade payment of tax; or (v) uses any conveyance as a means of transport for carnage of goods in contravention of the provisions of this Act or the rules made there under unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, then, all such goods or conveyances shall be liable to penalty under section 122. (2) Whenever confiscation of any goods or conveyance is authorized by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fit: Provided that such fine leviable shall not exceed the market value of the goods confiscated, less the tax chargeable thereon. Provided further that the aggregate of such fine and penalty leviable shall not be less than the amount of penalty leviable under sub-section (1) of section 129: Provided also that where any such conveyance is used for the carnage of the goods or passengers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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