TMI Blog2021 (9) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fundamental rights, guaranteed in Part III of the Constitution or of any other constitutional provisions. In STATE OF AP. VERSUS MCDOWELL CO. [ 1996 (3) TMI 525 - SUPREME COURT] , the Hon ble Supreme Court has held that except the above two grounds, there is no third ground on the basis of which the law made by the competent legislature can be invalidated and that the ground of invalidation must necessarily fall within the four corners of the aforementioned two grounds. Violation of of Article 14, 19 (1) (g) and Article 300 A of the Constitution of India or not - HELD THAT:- Article 19 (1) (g) of the Constitution guarantees that all citizens shall have the right to practice any profession, or to carry on any occupation, trade or business. However, these rights are not unqualified. It can be restricted and regulated by authority of law. Article 300 A provides that no person shall be deprived of his property save by authority of law. By Authority of Law means by or under a law made by the competent Legislature - 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-q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghvendra Singh Chauhan And The Hon ble Sri Justice Alok Kumar Verma For the Petitioner : Mr. Puneet Agarwal, the learned counsel. For the Respondent Nos. 1 to 3 : Mr. Mohit Maulekhi, the learned Brief Holder for the State of Uttarakhand. For the Respondent No. 4 : Mr. V.K. Kapruwan, the learned Standing Counsel for the Union of India. JUDGMENT : (PER HON BLE MR. JUSTICE ALOK KUMAR VERMA) Since both these writ petitions arise from similar set of facts, raise identical legal issues, and seek similar reliefs, the petitions are being decided by this common judgment. The Writ Petition (M/S) No.1014 of 2021 will be leading case. 2. The petitioner, M/s A.P. Refinery Pvt. Ltd., has prayed for the following reliefs before this Court:- Firstly, it has challenged the constitutional validity of Section 129 of the Central Goods and Services Tax Act/State Goods 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5926/20-21 301303351142 2. HR55M9073 5934/20-21 381303425665 3. RJ02GA9949 5930/20-21 351303410279 5. According to the petitioner, the Rice Bran Oil was loaded on the trucks on 27.03.2021. The drivers were given copies of the e-Way bills, the e-Invoices, the bilty for the purpose of transporting the said consignment to District Udham Singh Nagar, in Uttarakhand. The trucks left the petitioner s place on 27.03.2021. However, as 29.03.2021 was the festival of Holi, the drivers of the three trucks decided to wait in Ambala on 28.03.2021, lest the hooligans on the road intercept the trucks, or damage the consignment in the garb of celebrating Holi. 6. On the next day of Holi, i.e. on 30.03.2021, the trucks drivers resumed their journey for District Udham Singh Nagar. On 31.03.2021, around 05:00 A.M., the officers of the Assistant Commissioner (GST-State) of Udham Singh Nagar district intercepted the three trucks. The drivers produced the e-Invoices, the e-Way bills, the bilty, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .04.2021. The respondent no. 3 further asserted that the petitioner neither paid the tax, nor the penalty proposed in the show-cause notice dated 01.04.2021. 11. Moreover, on 08.04.2021, the Officers of the respondent no. 3 issued another set of supplementary notices, wherein they raised the issues with regard to classification of the oil being transported by the petitioner, and with regard to its description on the e-Invoices issued by the petitioner. 12. Surprisingly, the officers of respondent no. 3 again issued orders for physical verification and inspection all dated 31.03.2021. This was, indeed, surprising as this was the second time that Form GST MOV-02 was issued. The first Form GST MOV-02 had already been prepared on 01.04.2021. Therefore, why a back-dated order was being prepared on 31.03.2021 remains a mystery. 13. The petitioner replied to these abovementioned notices on 09.04.2021. It clearly pointed out that it had tried to submit the written submissions, to the show-cause notice dated 01.04.2021, on 08.04.2021 by hand in the office. However, the same was not accepted by the office. The petitioner also requested that it be allowed to submit the security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting him to respond to the notice issued in Form GST MOV-10. 19. In response to the notice dated 21.04.2021, the petitioner immediately submitted its reply on 22.04.2021. In the reply, it clearly pointed out that it had already deposited the Integrated Goods and Services Tax; it submitted copies of the returns in this regard before the respondent no. 3. It also pointed out that although the proceedings may not be in accordance with law, but nonetheless it is ready to deposit the bank guarantee for the penalty amount quantified by respondent no. 3. Further it requested the respondent no. 3 to release the goods and the trucks. 20. However, despite the reply submitted by the petitioner, inspite of the request made by the petitioner on 23.04.2021, the respondent no. 3 passed its order under Section 130 of the CGST/SGST Act, whereby it imposed tax, penalty and fine in lieu of confiscation of goods, and fine in lieu of confiscation of vehicles. On 23.04.2021, the respondent no. 3 has also issued summary of rectification/withdrawal orders dated 23.04.2021 in Form GST DRC-08 under Rule 142(7) of the CGST/SGST Rules. By these rectification orders, the respondent no. 3 has rectifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 thereunder, 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; (b) On payment of the applicable tax and penalty equal to the fifty per cent. of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty; (c) Upon furnishing a security equivalent to the amount payable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise of the powers conferred by Article 246 A of the Constitution of India, the Parliament had enacted the CGST Act and the State of Uttarakhand had enacted corresponding SGST Act. Article 246 A was incorporated by the Constitution (One Hundred and First Amendment) Act, 2016 (for short, the Amendment Act, 2016 ). Article 246 A is reproduced as below:- 246-A. Special Provision with respect to goods and services tax. (1) Notwithstanding anything contained in Article 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State. (2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Explanation.- The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of Article 279-A, take effect from the date of recommended by the Goods and Services Tax Council. 27. The expressions goods and services tax are defined under Article 366 (12-A) of the Constitution of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Legislature, is where there is a supply of goods and services . 30. The constitutional validity of an Act can be challenged only on two grounds viz. (i) lack of legislative competence; and (ii) violation of any of the fundamental rights, guaranteed in Part III of the Constitution or of any other constitutional provisions. In State of A.P. vs. McDowell and Co., (1996) 3 SCC 709, the Hon ble Supreme Court has held that except the above two grounds, there is no third ground on the basis of which the law made by the competent legislature can be invalidated and that the ground of invalidation must necessarily fall within the four corners of the aforementioned two grounds. In Goa Glass Fiber Ltd. Vs. State of Goa, (2010) 6 SCC 499, the Hon ble Supreme Court held that a statute can be held unconstitutional only on limited grounds viz. legislative incompetence and on the ground that it violates any of the fundamental rights or constitutional rights. 31. An Act enacted by the Parliament or the State Legislature cannot be declared unconstitutional lightly. In construing an enactment of a Legislature, the Court must presume that the enactment is intra-virus to the Constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Somchand Shah and another vs. Union of India and another, (1991) 2 SCC 48, Secretary, Finance Department and others Vs. West Bengal Registration Service Association and others, 1993 SCC Supp. (1) 153). 34. The classification under Article 14 must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group; and, the differentia must have a rational relation on the object sought to be achieved by the Act. What is necessary is that there must be a nexus between the basis of classification and the object of the Act which makes the classification. 35. In Ram Krishna Dalmia (supra), the Hon ble Supreme Court laid down the propositions governing a valid classification, which are as follows:- (1) A law may be constitutional even though it relates to a single individual if on account of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by itself. (2) There is always presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal thereto. 37. The object and purpose for enactment of SGST Act was to make a provision for levy and collection of tax on inter-State supply of goods or services or both by the State of Uttarakhand and for matters connected therewith or incidental thereto. 38. In view of the said objects and purposes for enacting of the enactments-in-question, the classification satisfies the test as laid down in the above propositions. The learned counsel for the petitioner could not able to show that there is no reasonable basis for a classification or such classification is discriminatory. 39. Article 19 (1) (g) of the Constitution guarantees that all citizens shall have the right to practice any profession, or to carry on any occupation, trade or business. However, these rights are not unqualified. It can be restricted and regulated by authority of law. Article 300 A provides that no person shall be deprived of his property save by authority of law. By Authority of Law means by or under a law made by the competent Legislature. 40. Under clause (6) of Article 19 of the Constitution, the State is authorized to impose reasonable restrictions on the right to carry on a trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanying each of the said vehicles had expired. The drivers of the said vehicles produced e-invoice, e-way bills, bilty, driving licence and registration certificate in respect of their vehicles and goods loaded thereon. 44. Mr. Mohit Maulekhi, the learned Brief Holder for the State, submitted that after proceedings of inspection of goods in movement under Section 68 of the CGST Act/ SGST Act, Form GST MOV-01 and Form GST MOV-02 were issued on 01.04.2021. After physical verification of the goods and the documents, Form GST MOV-04 and detention order in the nature of MOV-06 were issued on 01.04.2021. On the same day, i.e. 01.04.2021, Form GST MOV-07 was issued, wherein the nature of offence and the tax and penalty due under Section 129 were enumerated and communicated to the petitioner and seven days time period was provided to the petitioner to submit his reply. Upon failure of the petitioner to deposit tax and penalty specified in the Form GST MOV-07, the petitioner was informed that proceedings under Section 130 of the GST Act, 2017 would be initiated after expiry of due date i.e. fourteen days from the date of issue of the Form MOV-06. Thereafter the proceedings under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted thereon. (3) Where any fine in lieu of confiscation of goods or conveyance is imposed under sub-section (2), the owner of such goods or conveyance or the person referred to in sub-section (1), shall, in addition, be liable to any tax, penalty and charges payable in respect of such goods or conveyance. (4) No order for confiscation of goods or conveyance or for imposition of penalty shall be issued without giving the person an opportunity of being heard. (5) Where any goods or conveyance are confiscated under this Act, the title of such goods or conveyance shall thereupon vest in the Government. (6) The proper officer adjudging confiscation shall take and hold possession of the things confiscated and every officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession. (7) The proper officer may, after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel appearing for the petitioner, submitted that despite the reply submitted by the petitioner and inspite of the request made by the petitioner on 23.04.2021, the petitioner was not given an opportunity of being heard before passing the orders under Section 130 in Form GST MOV-11 on 23.04.2021. Mr. Mohit Maulekhi, the learned Brief Holder for the State, submitted that upon expiry of seven days period provided to the petitioner in Form GST MOV-10 notices, orders were passed under Section 130 in the Form GST MOV-11 on 23.04.2021. 48. A statute is an edict of the Legislature. The first and primary rule of interpretation of a statute is that the intention of the Legislature must be found in the words used by the Legislature itself. Therefore, the statute should be read as it is, without distorting or twisting its language. 49. Section 130 talks about confiscation of goods or conveyances and levy of penalty. Before invoking the provisions of Section 130 for confiscation, there should be a very strong base to proceed for confiscation. Mere suspicion is not sufficient to invoke the provision of the confiscation. Moreover, the petitioner should be given an opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application. (4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month. (5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed. (6) No appeal shall be filed under sub-section (1), unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed. (7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed. (8) The Appellate Authority shall give an opportunity to the appellant of being hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. (15) A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf. (16) Every order passed under this section shall, subject to the provisions of section 108 or section 113 or section 117 or section 118 be final and binding on the parties. 52. In Writ Petition (S) (Criminal) No.(S) 272 of 2020, Devendra Dwivedi vs. Union of India, the petitioner had challenged the constitutional validity of certain provisions of the CGST Act. The Hon ble Supreme Court on 07.01.2021 dismissed the writ petition after holding, The petitioners have an efficacious remedy in the form of proceedings under Article 226 of the Constitution to challenge the constitutional validity of the provisions of the statute which are placed in issue . 53. In view of the above detailed discussion, both the writ petitions are allowed partly. Consequently, we quash and set aside the impugned orders dated 23.04.2021, passed by the respondent no.3 under Section 130 in F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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