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TMI Blog2021 (9) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and Services Tax Act ("CGST/SGST Act" for short), read with Rule 140 of the CGST/SGST Rules. Secondly, it has also sought a declaration that Section 129 of the CGST Act does not mandate the deposit of tax again, once the tax is already paid. Thirdly, it has challenged the show-cause notice dated 01.04.2021, passed by the respondent-department under Section 129(3) of the CGST/SGST Act. Fourthly, it has challenged the legality of different orders, dated NIL, passed by the respondent no. 3 under Section 129(3) of the CGST/SGST Act. Fifthly, it has challenged the order dated, 01.04.2021, passed by respondent no. 3, for detaining the trucks owned by the petitioner. Sixthly, it has challenged the rectification/withdrawal orders dated, 23.04.2021, passed by the respondent no. 3 under Rule 142(7) of the CGST/SGST Rules. Seventhly, it has challenged the order dated 17.04.2021, issued by the respondent No.3 under Section 130 of the CGST/SGST Act. It has also challenged the number of orders, all dated 23.04.2021, issued in Forms GST DRC-07, under Se+ction 130 of the CGST/SGST Act passed by the respondent No.3. 3. Briefly, the facts of the case are that the petitioner, M/s A.P. Refin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The drivers' statements were recorded on 01.04.2021 in Form GST MOV-01. 7. Since the e-Way bills had expired within three days, the respondent no. 3, the Assistant Commissioner (GST-State), issued three separate orders, all dated 01.04.2021, for physical verification/inspection of the consignment. Upon physical verification, the description on the e-Invoices was found to be matching with the physical goods verified in the vehicle, namely fixed vegetable oils of vegetable grade i.e. mango kernel oil, mahua oil and rice bran oil. Even the quantity of the goods recorded in the e-Invoices matched with the physically verified quantity. 8. Furthermore, the officers of respondent no. 3 passed orders of detention under Section 129(1) of the CGST/SGST Act 2017, and under Section 20 of the Integrated Goods and Services Tax Act, 2017 ("IGST Act, 2017" for short). Despite the fact that there was no discrepancy, which was discovered during the physical verification of the trucks, still the officers of respondent no. 3 ordered the detention of the goods, and of the trucks for further proceedings. Therefore, the trucks were directed to be moved to MSO, Rudrapur. 9. Moreover, on 01.04.2021, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 09.04.2021, the petitioner submitted a detailed reply to the supplementary notices issued by respondent no. 3. The petitioner categorically requested the respondent no. 3 to take the said reply into consideration, and to release the trucks and the goods detained by them. However, despite these replies, the respondent no. 3 did not give an opportunity of hearing to the petitioner. Instead by three separate orders, all dated NIL, the three trucks belonging to the petitioner were detained by respondent no. 3 under Section 129(3) of the CGST/SGST Act. In the said orders, according to the petitioner, the respondents have entered into the issue of classification of the Rice Bran Oil, although such an issue could not be raised at this stage by the department. 15. After passing the impugned orders dated NIL, the respondent-department carried out a correction in the said order, and amended Page No. 4 of the said order. 16. Since the petitioner was aggrieved by the said orders dated NIL, on 05.04.2021 it submitted a representation before the respondents. Despite the submission of the said representation, on 15.04.2021, the respondent no. 3 again issued notices to the petitioner, wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SGST Act. According to the petitioner, these orders dated 23.04.2021 were passed without giving an opportunity of hearing to the petitioner. Hence, the present writ petition. 21. Heard Mr. Puneet Agarwal, the learned counsel for the petitioner, Mr. Mohit Maulekhi, the learned Brief Holder for the State, the respondent nos.1 to 3 and Mr. V.K. Kapruwan, the learned Standing Counsel for the Union of India, the respondent no.4 and perused the record. 22. During the arguments, Mr. Puneet Agarwal, the learned counsel for the petitioner, confined himself to two points: firstly, he has challenged the constitutional validity of Section 129 of the Central Goods and Services Tax Act, 2017 as well as the same Section i.e. Section 129 of the Uttarakhand Goods and Services Tax Act, 2017 and Rule 140 of the CGST Rules, 2017 on the grounds that these provisions are arbitrary, unreasonable and violative of Article 14, 19 (1) (g) and Article 300 A of the Constitution of India. Secondly, that the petitioner was not given an opportunity of being heard before passing the orders dated 23.04.2021 by the respondent no.3 under Section 130 in Form GST MOV-11. 23. Per contra, Mr. Mohit Maulekhi, the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d without serving an order of detention or seizure on the person transporting the goods. (2) The provisions of sub-section (6) of Section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances. (3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c). (4) No tax, interest or penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard. (5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub- section (3) shall be deemed to be concluded. (6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within fourteen days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of Section 130. Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he alcoholic liquor for human consumption." 28. The expression "supply" is defined under Section 7 of the CGST Act, 2017, which reads as follow:- 7. Scope of Supply.- (1) For the purposes of this Act, the expression "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business, and (c) the activities specified in Schedule I, made or agreed to be made without a consideration. (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub- section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1)- (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present matter, Mr. Puneet Agarwal, the learned counsel for the petitioner, submitted that Article 14 of the Constitution forbids class legislation; Article 19 (1) (g) guarantees that all citizens shall have the right to practice any profession, or to carry on any occupation, trade or business and Article 300 A provides that no person shall be deprived of his property save by authority of law. According to the learned counsel for the petitioner, the provisions-in-question are violative of Article 14, 19 (1) (g) and Article 300 A of the Constitution of India. 33. The equal protection of laws guaranteed by Article 14 does not mean that all laws must be general in character. In fact, identical treatment in unequal circumstances would amount to inequality. Article 14 prohibits class-legislation, but it does not forbid reasonable classification. It does not forbid reasonable classification of persons, objects and transactions by the legislature for the purpose of achieving specific ends. In Budhan Chowdhry vs. State of Bihar, 1955 (1) SCR 1045, the Hon'ble Supreme Court has held that Article 14 prohibits class-legislation and not reasonable classification for the purpose of legis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or class, and yet the law hits only a particular individual or class. (4) It must be presumed that the Legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discrimination are based on adequate grounds. (5) In order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of report, the history of the times and may assume every state of facts which can be conceived existing at the time of the legislation. (6) The Legislature is free to recognize degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest. (7) While good faith and knowledge of the existing conditions on the part of a Legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... munity from taxation. The fundamental right of citizen to practice any profession or carry on any trade or business is not wholly free from the taxing power of the Parliament or the State. No citizen has any right to carry on his trade or business without paying taxes lawfully levied by the Parliament or the State. In State of West Bengal vs. Subodh Gopal Bose, AIR 1954 SC 92, the Hon'ble Supreme Court held that taxation is an independent power of the State and there is no fundamental right to be immune from taxation. In Kailash Nath vs. State of U.P., AIR 1957 SC 790, the Hon'ble Supreme Court held that a tax law otherwise valid creates no unreasonable restriction. In the facts and circumstances of the instant matter, the learned counsel for the petitioner could not able to show that the provisions of the enactments-in-question are unreasonable or the object of these enactments are to destroy a fundamental right/ constitutional right. 42. The petitioner is a registered dealer under the CGST Act, 2017/ Punjab GST Act, 2017 and is carrying on business of manufacture and sale of "Rice Bran Oil (Grade 2)". The petitioner generated e-way bill no.301303351142 for vehicle Registration N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner to deposit tax, penalty, fine on goods and on conveyance as provided under Section 130 (2). 45. At this stage, the provisions of Section 130 is reproduced hereunder:- "130. Confiscation of goods or conveyances and levy of penalty - (1) Notwithstanding anything contained in this Act, if any person- (i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (ii) does not account for any goods on which he is liable to pay tax under this Act; or (iii) supplies any goods liable to tax under this Act without having applied for registration; or (iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder 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 confiscation and the person s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce any prescribed document or where the proper officer intends to undertake an inspection, he shall record a statement of the person in-charge of the conveyance in Form GST MOV-01. In addition, the proper officer shall issue an order for physical verification/inspection of the conveyance, goods and documents in Form GST MOV-02, requiring the person in charge of the conveyance to station the conveyance at the place mentioned in such order and allow the inspection of goods. Within twenty four hours of the issuance of Form GST MOV-02, the proper officer shall prepare a report in Part A of Form GST EWB-03 and upload the same on the common portal. On completion of the physical verification/inspection of the conveyance and the goods in movement, a report of such physical verification shall be prepared by the proper officer in Form GST MOV-04 and a copy of the said report shall be served to the person in charge of the conveyance and goods. Where the proper officer is of the opinion that the goods and conveyance need to be detained under Section 129, he shall issue an order of detention in Form GST MOV-06 and a notice in Form GST MOV-07 in accordance with the provision of sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 130 in Form GST MOV-11, are not found to be passed in accordance with law. Therefore, the said impugned orders dated 23.04.2021 are liable to be quashed and set aside. 50. The last submission of Mr. Mohit Maulekhi, the learned Brief Holder for the State, is that the petitioner has alternative and efficacious remedy before the appellate authority under Section 107 of the Act of the CGST Act/SGST Act, therefore, the writ petitions are not maintainable. 51. Section 107 of the CGST Act/SGST Act is reproduced hereunder:- "107. Appeals to Appellate Authority- (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. (2) The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order under this Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable. (11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order: Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order: Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within ..... 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