TMI Blog2018 (8) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... t. It has also pleaded that it approached the officials about the difficulties it faced, but was only advised that it must try again. Tried again, it succeeded; but by then, the authorities detained the goods. At least, thus goes the allegation. Garuda contends that its failure, if any, is trivial, technical. Can the Court exercise its discretion to dilute the statutory rigour? - Held that:- Judicial Power is never exercised for the purpose of giving effect to the will of the judge; always for the purpose of giving effect to the will of the legislature; or, in other words, to the will of the law - The language and the legislative intent clear, courts, in the name of discretion, cannot do violence to the statutory mandate. Discretion smooths the edges, but does not cut corners - there are no interpretative ambiguity or legislative crevasses to be filled in. Garuda can have the provisional release of the goods, pending further adjudication under Section 129(1) of the Act, only if it complies with the statutory mandate. If it provides a bank guarantee for the tax and the penalty, besides executing a bond for the value of goods, as directed under Rule 140 of the KSGST Rules, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the Deputy Commissioner, SGST. Again, on advice, Garuda tried once more and, at last, uploaded part B. Then it filed the Ext. P8 reply along with the Ext.P7 copy of the e-way bill, incorporating Part B as well. Still, on 6th August 2018, the ASO issued the Ext. P9 demand notice, demanding tax and penalty, both amounting to ₹ 187,916/-. 6. Aggrieved, Garuda filed this writ petition: it wants the Court to quash the Ext. P9, besides directing the ASO to release the detained goods and the vehicles. Indeed, Garuda wants the Court to declare the provisions empowering the GST officials to demand tax and penalty and to detain goods and vehicles, as unconstitutional till the smooth, efficient and glitches free functioning of the GST network system is guaranteed to assessees. Submissions: Petitioner s: 7. Sri KS Hariharan Nair, the petitioner s counsel, contends that the Ext. P5 order of detention and the Ext. P9 notice demanding tax and penalty fail the scrutiny of law. According to him, the consignment contained every document the new tax regime requires, including the e-way bill. On the incomplete e-way bill, Sri Nair submits that Garuda had no intention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial review or judicial discretion. Judicial discretion, she continues, can only fill the statutory crevices, if any, but not to stultify the efficacy of the statutory mandate. 12. In the end, Dr. James has drawn my attention to the Division Bench decisions of this Court in Commercial Tax Officer v. Madhu M.B., (2017) 64 GST 9 (Kerala) The Assistant State Tax Officer v. Indus Towers Limited, MANU/KE/1685/2018 Renji Lal Damodaran v. State Tax Officer, Judgment, dt.06.08.2018, in W.A. No.1640 of 2018 and Gati Kintetsu Express Pvt., Ltd., v. Commercial Taxes Department. Judgment, dt.5.7.2018, in W.P. 12399 of 2018, High Court of MP (DB) Analysis: 13. In a federal constitutional set up, coordination rather than subordination at its heart, the States and the Central as the constituents have demarcated spheres of legislation and governance. With clearly demarcated legislative fields, neither legislation can trespass upon the other-the residuary powers lying with the Centre, though. The division of powers is zealously guarded in no other sphere than fiscal. Taxation as the backbone of a welfare nation, which India is, the legislative fields are as distinct, yet interconne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter XIX provides the mechanism for detention, seizure, and release of goods and conveyances in transit. It begins with a non-obstante clause and goes on to lay down the procedure. If any person transports or stores any goods contravening this Act or its rules, all those goods and means of transport and documents relating to those goods and conveyance will be detained or seized. They will, however, be released to the owner of the goods (a) on its paying the applicable tax and penalty equal to one hundred percent of the tax payable on the goods. If the goods belong to an exempted category, a different rate applies, though. 21. If a person other than the owner-for example, a transporter-comes forward, it will have the goods released (b) on its paying the applicable tax and penalty equal to the fifty percent of the goods value reduced by the tax amount paid under each Act. Of course, the exempted goods do carry a different rate. Clause (c) of Section 129 permits the consignor or the other party to furnish a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed. The proviso to Section 129 ensures the principles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansporter will generate Part B, based on that information. If the value of goods sought to be transported exceeds ₹ 50,000/-, every supplier, recipient, and the transporter must generate the e-way bill. For the value below ₹ 50,000/-, e-way bill is optional. E-way bill, I reckon, cannot be treated as complete unless both Part A and Part B get filled. 28. Under Rule 2 (1) of the Rules, the person in charge of a conveyance must carry-(a) the invoice or bill of supply or delivery challan; and (b) a copy of the e-way bill or the e-way bill number, either physically or mapped to an RFID, Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects. The tags contain electronically-stored information embedded on to the conveyance. 29. Here, Garuda did not fill Part B of the e-way bill. It cited technical difficulties as the reason. On interception and after detention, it fulfilled that requirement. It has also pleaded that it approached the officials about the difficulties it faced, but was only advised that it must try again. Tried again, it succeeded; but by then, the authorities detained the goods. At l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is a mere legal discretion, a discretion to be exercised in discovering the course prescribed by law; and when that is discovered, it is the duty of the Court to follow it. Judicial Power is never exercised for the purpose of giving effect to the will of the judge; always for the purpose of giving effect to the will of the legislature; or, in other words, to the will of the law. As quoted in Aharon Barak s Judicial Discretion, p.21 34. From the unsettling days of John Marshall, CJ., to the tumultuous times of Antonin Scalia, the US Supreme Court espoused the same view. I reckon the Indian judicial view is no different. The language and the legislative intent clear, courts, in the name of discretion, cannot do violence to the statutory mandate. Discretion smooths the edges, but does not cut corners. Here, I see no interpretative ambiguity or legislative crevasses to be filled in. Precedential Analysis: 35. Garuda has relied on a plethora of precedents to drive home its contention that this Court can dilute statutory rigour and order interim release of the detained goods. We will examine them. 36. In Ashok Leyland, a consignment of motor vehicle chassis were transp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any tax evasion. The Court, then, has also found there were admittedly some difficulties about downloading the e-way bill and that doubts remained on the requirement and submission of the e-way bill. So it quashed the detention order. 42. In Rivigo Services, again the Allahabad High Court has examined, I reckon, an identical issue as we have now faced. It concerns incomplete Part B of the e-way bill. In fact, the Division Bench has relied on the UP Governments clarification: when the goods were re-loaded in a vehicle, meant for delivery to the consignee, the transporter or the dealer s failure to fill the Part B is not fatal. On that concession, the Division Bench allowed the writ petition. 43. In SBGC Logistics, the Government decided to exempt the consignor or the transporter from filling up Part B of the e-way Bill if the goods are transported within 50 km. The petitioner could show that the consignment was meant to be transported within that distance. So the Allahabad High Court held that the detention could not be sustained. 44. In Gati Kintetsu Express, too, the authority, on inspection, found an irregularity in Part-B of the e-way accompanying the goods. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e delivery challan. Nor did the transaction amounted to a taxable supply. So the finding goes thus: a mere infraction of the procedural Rules like Rules 55 and 138 of the State GST Rules cannot cause the detention of goods, though they may cause the imposition of penalty. The goods were ordered to be released. The Department assailed the direction. 49. The learned Division Bench, after examining the statutory and the precedential positions, has observed that sub-section (3) of section 55 specifically speaks of a declaration as specified in Rule 138. When goods are transported on a delivery challan, instead of an invoice; that violates the Act and Rules. The Division Bench did not agree with the learned Single Judge s view that the Department accepted the genuineness of the delivery challan. A delivery challan under section 55, it observes, is not one issued by the Department but is one prepared by the assessee, who is only obliged to maintain it serially numbered. It does not lie in the detaining officer's mouth to suspect the genuineness of the delivery challan when the consignor swears by it. The Division Bench, in fact, observed that non-taxable nature of the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be diluted. 52. Under these circumstances, the conclusion is inescapable: Garuda can have the provisional release of the goods, pending further adjudication under Section 129(1) of the Act, only if it complies with the statutory mandate. If it provides a bank guarantee for the tax and the penalty, besides executing a bond for the value of goods, as directed under Rule 140 of the KSGST Rules, the authorities will provisionally release the goods. Does any more adjudication remain under Section 129 (1) of the Act? 53. When I dictated the judgment affirming the Department s stand, then, Sri Hariharan has submitted that the Act itself contemplates expeditious disposal of the entire inquiry under Section 129-in seven days. So he wants this Court to direct the authorities to complete the inquiry and pass orders in one week from today. He has also expressed an apprehension: unless an authority superior to the inspecting authority undertakes the inquiry under section 129, prejudice may creep into the proceedings. 54. Yet Dr. Thushara James, the Government Pleader, has submitted that the goods detained, notice issued under Section 129(1), and the Garuda s reply received, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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