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TMI Blog2023 (11) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... the supply being a taxable supply, SGST component of the GST is creditable to Kerala State. It is also stated in the said communication that if supply is not a taxable supply, for job work as claimed by the petitioner, the supplier should issue the supply documents (Delivery challan), the details of which have to be reflected in the accounts records of the consignee. Without this supply document, the nature of supply, the accountability of the transaction and also the further movement of goods at the hands of the consignee cannot be monitored by the department. In the absence of an online declaration like KER -1, E way bill etc. the monitoring of the further movement of the goods becomes more difficult. 3. It is stated that the breach of the rule has taken place inasmuch as the supply documents that caused the movement of the goods to the destination was not carried by the conveyance, and this contravention of the provisions of the Act requires the inspecting officer to issue notice under Section 129(3) of the GST Act for which the notice has already been issued and the goods would be released as per the law. 4. The petitioner is engaged in the manufacture and sale of Carbon Bla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the stand taken was that there was violation of the provisions of the Act at the hands of the petitioner transporting of goods covered by Ext.P1 invoice. The goods were released vide Ext.P11 only on the petitioner making payment under protest. Learned counsel for the petitioner submits that the stand taken by the respondents in Exts.P3 and P4 notices, and Ext.P8 proceedings is unsustainable in law, and the entire proceedings initiated under Section 129 are wholly without jurisdiction. 7. It is submitted that Section 10(1)(b) of the IGST Act, 2017 provide that when goods are sent to a job worker under the instructions of the buyer/principal, the delivery at the business premises of the job worker is deemed to be receipt of goods by the principal and the place of supply of such goods shall be the place of business of the buyer/principal. He therefore submits that under Section 10(1)(b) of the IGST Act, in the present case, the place of supply would be the misplace of business place of MRF Limited which is in the State of Tamil Nadu. Learned counsel for the petitioner further submitted that under Section 7 of the IGST Act, a supply would be treated as an inter-state supply, if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in strict compliance with the job work procedure contemplated under Section 143 of the CGST Act, read with Ext.P12 circular. Learned counsel for the petitioner submits that the reasons recorded in paragraph 8 of Ext.P8 that the non-accompaniment of the documents for supply of goods by the buyer/principal to the job worker along with the transport is a violation of Section 31(1) is against the statutory prescription and circular Ext.p12. 10. The delivery of goods would be deemed to the business place of the buyer/principal as per Section 10(1)(b) of the IGST Act only on delivery to the job worker. The goods were detained by the respondents before it reached the premises of the job worker. Unless the goods are reached to the job worker, same can never be with the buyer/principal. Therefore, it was the statutory duty of the petitioner to respond to the notices issued, and the proceedings initiated by the respondents inasmuch as the goods were intercepted before they reached to the job worker. Learned counsel for the petitioner also submits that even if it is held to be an intra-state transaction by the proper officer, Section 77(2) of the CGST Act provides for a transfer of the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the petitioner is violation of provisions of Section 129 of the Act and not for evasion of tax. The penalty under Section 129 would be applicable even in cases where the goods transported are exempted goods if such obligations as prescribed under the statute are violated. The Mandatory form prescribed as KER-1 is applicable even to transaction covered by IGST Act, 2017 before introduction of Eway bill and declaration prescribed under Rule 138 is mandatory even for transport of goods to the job worker. The mens rea is not a factor to be proved for imposition of penalty under Section 129 of the Act. In support of the said contention learned Government Pleader has placed reliance on the judgment of this Court in the case of Assistant State Tax Officer v. Indus Towers Limited, [2018(3)KLT Online 2053]. 13. Two questions required consideration by this Court in the present writ petition;- 1) Whether the supply of goods to the job worker of M/s.MRF Limited, Arakonam, Tamil Nadu at Kannur, Kerala is inter-state supply or intra-state supply?; and, 2). Whether the proceedings initiated under Section 129 of the CGST Act/KGST Act against the petitioner are without jurisdiction. 14. Provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union territory shall be treated as intra-State supply; (i) Supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit; (ii) goods imported into the territory of India till they cross the customs frontiers of India; or (iii) supplies made to a tourist referred to in section 15. (2) Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply: Provided that the intra-state supply of services shall no include supply of services to or by a Special Economic Zone developer or a Special Economic Zone unit. Explanation 1. - For the purposes of this Act, where a person has- (I) an establishment in India and any other establishment outside India. (ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or (iii) an establishment in a State or Union territory and any other establishment being a business verti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient; (d) where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly; (e) where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board. (2) Where the place of supply of goods cannot be determined, the place of supply shall be determined in such manner as may be prescribed. 19. In case of supply which involves movements of goods, the place of supply of such goods would be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient. Section 10(1)(b) is an exception to to the Section 10(1)(a). Under Section 10(1)(b) above, the place of supply of goods in case where the supply is made on the direction of the third person, it would be deemed as third person has recived the goods and the place of supply of such goods shall be the principal place of business of such third person. Section 20 of the IGST Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e custom station of import, the goods may move from the customs station of import to the place of business/premises of the job worker with a copy of the Bill of Entry and the principal shall issue the challan under Rule 45 of the CGST Rules and send the same to the job worker directly." 22. In the present case, Ext.P1 invoice issued by the petitioner describes the buyer/principal as the customer and the job worker as the consignee and it is in compliance of job work procedure contemplated under Section 143 of the Act read with Ext.P12 circular. 20. In view thereof, the supply being intra-state supply, the said supply would be governed under the IGST Act and Rules made thereunder and not under the CGST/KSGST Act and Rules. 23. The issue regarding non-requirement of generation of KER-1 as raised by the learned Government Pleader is also required to be considered. Rule138(1) prescribes the documents which are to be carried by the conveyance of goods, which reads as under : "138. Documents to be carried with the consignment of goods.-(1) A person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified, while transporting good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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