TMI Blog2020 (11) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... sections of the SGST Act. In Serial No.23, certain officers viz., (i) Goods and Service Tax Officer (ii) Deputy Assistant Commissioner (iii) Assistant Commissioner (iv) Deputy Commissioner and (v) Joint Commissioner having jurisdiction and/or (i) Deputy Assistant Commissioner (ii) Assistant Commissioner and (iii) Deputy Commissioner as authorised by the additional Commissioner/Commissioner in case of State Enforcement Wing are authorised as Proper Officers to act under Section 68(3). While so, by an amendment vide Ref.No.CCW/GST/74/2015 dated 28.03.2018 the Commissioner of Commercial Taxes authorized the officer not below the cadre of Deputy Assistant Commissioner of State Tax as Proper Officer for the purpose of Section 68(3). In the instant case, the confiscation proceedings are issued by the Deputy Assistant Commissioner (ST)-I, Hindupur, the first respondent herein, who is authorised as per the above Gazette notification. Whether the 1st respondent is legally justified in proceeding simultaneously under Section 129 130 of the CGST Act against the petitioners? - HELD THAT:- We have gone through the case of SYNERGY FERTICHEM PVT. LTD VERSUS STATE OF GUJARAT [ 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orization as contemplated under Section 67 of the Central Goods and Service Act, 2017 (for short, CGST Act ), arbitrary, without jurisdiction and consequently to set aside the confiscation proceedings. 2. The petitioners case succinctly is thus: (a) 1st petitioner is the Proprietrix of M/s. Sangeetha Jewellers, Madhugiri Town, Karnataka State, doing business in silver ornaments and a registered dealer under the Goods and Service Tax Act, 2017 since May, 2018, having GST Registration No.29GZIPS5843AIZZ. The 2nd petitioner is her husband and 3rd petitioner is the brother-in-law of 1st petitioner. (b) As the business of 1st petitioner was not up to the mark, they decided to shift their business from Madhugiri to Pavagada Town in Karnataka. On 15.01.2020, at about 06.30 A.M. when the petitioners along with one Smt. J.Devi, the grand mother of 2nd petitioner, were proceeding in their vehicle Creta bearing No.KA 06Z 1813 along with accounts and stock of 69 Kgs of silver ornaments to the newly established business premises at Pavagada, which was taken on lease on 01.12.2019, on the way the 2nd respondent intercepted their vehicle at Y.B.Halli Check Post and seized the silver or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding. (b) The 2nd respondent intercepted the petitioners vehicle on 15.01.2020 and seized the silver ornaments and vehicle and intimated the said fact to 4th respondent on 17.01.2020. He informed that at the time of interception Sri Prakash, S/o. Nemaram Sri Mohan Lal, S/o. Bhikaram, Madhugiri, Tumkuru District were incharge of goods vehicle. He further informed that they were conveying 69 Kgs of silver ornaments worth ₹ 28.00 lakhs without having any bills and supporting documents and without paying GST. Therefore, he prepared mahazarnama in the presence of revenue officials and kept the goods and the conveyance in his safe custody. (c) The 4th respondent in his turn, while forwarding the records (a) letter of the Inspector of Police, Madakasira Circle dated 15.01.2020 (b) Mahazarnama recorded in the presence of revenue officials dated 15.01.2020, authorised the Deputy Assistant Commissioner (ST)-1, Hindupur to take further action in the matter since the petitioners have violated Section 68 r/w Rule 138A (a) of the SGST Act and Rules 2017. It is further clear that the petitioners intended to evade the payment of legitimate tax due for the consignment. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces under MOV-07 MOV-09 were not required to be served since action was initiated under Section 130. It is further contended that the 1st respondent acted in contravention of Section 129(6) of the SGST Act. Even assuming that the notice dated 20.01.2020 was issued, without waiting for 14 days from the said date, he ought not to have issued confiscation notice on the same day. Thus, the confiscation notice dated 21.01.2020 issued under Section 130 of the SGST Act is not valid in the eye of law. It is further contended that the petitioners have explained to the authorities that they were shifting their business from Madhugiri to Pavadaga and the left over stock of 69 Kgs of silver ornaments were being shifted to the new business premises. In support of their case the petitioners filed various documents. The respondent authorities, however, not properly considered the explanation of the petitioners dated 28.01.2020 and their documents. Hence, the impugned order is liable to be set aside. 5. Heard the arguments of Sri Sk. Jeelani Basha, learned counsel for petitioners, and Sri Y.N.Vivekananda, learned Government Pleader for Commercial Taxes-II representing the respondents. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the consequent proceedings under Section 130 of the SGST Act are therefore, null and void. (b) Secondly, he argued, 1st respondent has not given an opportunity to the petitioners to establish their case nor he objectively analysed and assessed the probative value of the documents produced by the petitioners along with their explanation to show that the detained stock had already suffered the tax under the SGST Act. 1st respondent, without giving any plausible reasons, simply rejected the documents on an untenable ground that they were fabricated with an afterthought. Learned counsel vehemently argued that the 1st respondent cannot brand the documents produced by the petitioners as afterthought without assigning any reason. The documents such as monthly returns etc., cannot be manipulated by the petitioners since, they were maintained over a long period during the course of their day-to-day business. Hence, without making an objective analysis it is not apt on the part of the 1st respondent to reject them on the ground that they were created by an afterthought. Had a reasonable opportunity been given, the petitioners would have established the genuinity of all the documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have not paid the tax while purchasing those silver ornaments and went away stating that they would come soon. Therefore, the 2nd respondent handed over the goods and vehicle to 4th respondent who authorised 1st respondent to take up the proceedings. Learned Government Pleader further argued that since the petitioners failed to produce relevant documents and did not turn up, he decided to take up the proceedings under Sections 129 130 of the CGST Act. Accordingly, he issued Form GST MOV-6 notice of detention dated 20.01.2020 under Section 129(1). As there were none to receive, he got affixed the said notice on the vehicle. Learned Government Pleader would submit that since the 1st respondent proposed to proceed under Section 130 also, he did not issue notice in Form GST MOV-07 under Section 129(3) of the CGST Act specifying the tax and penalty payable on the seized goods and conveyance. He further argued that 1st respondent then issued a Form GST MOV-10 under Section 130 directing the petitioners to show cause within 14 days as to why the seized goods shall not be confiscated and the said notice was also affixed on the vehicle. Apart from it, 1st respondent also got iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... azette notification No.37, the Chief Commissioner of State Tax notified certain officers as Proper Officer occurring in different sections of the SGST Act. In Serial No.23, certain officers viz., (i) Goods and Service Tax Officer (ii) Deputy Assistant Commissioner (iii) Assistant Commissioner (iv) Deputy Commissioner and (v) Joint Commissioner having jurisdiction and/or (i) Deputy Assistant Commissioner (ii) Assistant Commissioner and (iii) Deputy Commissioner as authorised by the additional Commissioner/Commissioner in case of State Enforcement Wing are authorised as Proper Officers to act under Section 68(3). (a)While so, by an amendment vide Ref.No.CCW/GST/74/2015 dated 28.03.2018 the Commissioner of Commercial Taxes authorized the officer not below the cadre of Deputy Assistant Commissioner of State Tax as Proper Officer for the purpose of Section 68(3). In the instant case, the confiscation proceedings are issued by the Deputy Assistant Commissioner (ST)-I, Hindupur, the first respondent herein, who is authorised as per the above Gazette notification. 10. Point No.2: Admittedly, in this case the goods i.e., 69180.824 grams of silver ornaments were detained while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents, the petitioners did not produce any documents like e-way bill, invoice/tax receipts etc. as stipulated under Section 68 r/w 138 138A of the CGST Act and its Rules. 12. Then according to 4th respondent, he issued Form GST MOV-06 detention notice under Section 129(1) of the CGST Act to the petitioners and as they were not available, got affixed on the vehicle in the presence of the mediators. According to him, since the petitioners failed to produce any documents, he proposed to initiate the confiscation proceedings also and hence, he issued Form GST MOV-10 confiscation notice under Section 130 of the CGST Act to the petitioners to show cause within 14 days as to why the goods and conveyance shall not be confiscated and the said notice was also affixed on the vehicle in the presence of the mediators. Learned Government Pleader produced the copies of Form GST MOV-6 and Form GST MOV-10 along with counter. Therefore, the contention of the petitioners that no notices were issued to them as prescribed under law cannot be countenanced. 13. Now the crucial question is whether the 1st respondent is justified in proceeding simultaneously under Section 129 130 of the CGST Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contravention was with a definite intent to evade payment of tax. The action, in such circumstances, should be in good faith and not be a mere pretence. In other words, the authorities need to make out a very strong case. Mere suspicion may not be sufficient to invoke Section 130 of the Act straightway. (iv) If the authorities are of the view that the case is one of invoking Section 130 of the Act at the very threshold, then they need to record their reasons for such belief in writing, and such reasons recorded in writing should, thereafter, be looked into by the superior authority so that the superior authority can take an appropriate decision whether the case is one of straightway invoking Section 130 of the Act. (emphasis supplied). (v) Even if the goods or the conveyance is released upon payment of the tax and penalty under Section 129 of the Act, later, if the authorities find something incriminating against the owner of the goods in the course of the inquiry, if any, then it would be permissible to them to initiate the confiscation proceedings under Section 130 of the Act. (vi) Section 130 of the Act is not dependent on sub-section (6) of Section 129 of the Act. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need to record his reasons for his belief that the assessee has deliberately avoided the payment of tax, so also, during the course of enquiry under Section 130, the authority shall, in terms of Section 130(4), afford an opportunity of hearing to the person whose goods and conveyance are sought to be confiscated and record cogent reasons for rejecting the contention of the owner. This point is answered accordingly. 16. Point No.3 : With the above jurisprudence holding that the authority can simultaneously proceed under Section 129 and 130 of the CGST Act, we have scrutinized the impugned confiscation order dated 04.02.2019 passed by the 1st respondent. As against the confiscation notice under Form MOV-10 dated 21.01.2020, admittedly the 1st petitioner submitted her explanation along with documents mentioned therein. Hence, initially we perused her explanation. Her case precisely is that the 69 KGs silver ornaments under transport were related to M/s. Sangeetha Jewellers, Madhugiri for which she is the Proprietrix and those silver ornaments were purchased by the petitioners from the registered GST dealers covered by proper invoice and GST tax was already paid. Due to some unfa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re branding the explanation as afterthought without assigning reasons as to how the documents are fabricated ones will not make the order legally justified. The falsity of the records shall be established by analysing the records but not simply branding them as afterthought. 19. The third reason is that though a personal hearing was granted on 03.02.2020 the petitioners have not availed the same. This reason is also quite inadequate, as the petitioners have already filed their explanation along with record. Therefore, without scrutinizing the said record in terms of the explanation and not noting any adverse comments on the probative value and genuinity of the said record, it was not apposite for 1st respondent to reject the contention of the petitioners. It should be made clear that the orders of Public Servants some of whom are quasi judicial authorities, which have the far reaching effect on the life, liberty, property and welfare of the public must be based on cogent reasons. The reason is the live nerve of an order. In Sneh Enterprises (1 supra) the Hon ble apex court held that the Tax Statutes need strict interpretation. It follows that while interpreting the Tax Statutes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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