GST Update No 291 on transporter cannot seek release of goods

The consistent hike in the cases of detention of goods and conveyance has increased the anxiety of the taxpayers. Further, imposition of high penalties has its chain effect on the overall operations of the business of the taxpayers. With the passage of time, the revenue authorities are needlessly invoking draconian powers of detention in the greed of increasing revenue base. Although, it is very well known that the High Courts interfere to grant relief to the taxpayers, still in some situation assessees do not get appropriate relief. On the same subject line, recently one case was listed before hon’ble Madras High Court in the case of TCI FREIGHT V/S THE ASSISTANT COMMISSIONER. The decision imparted in this case is subject matter of discussion of our present update.
The petitioner is engaged in supply of TMT bars from Hosur. An e-way bill was generated for movement of goods along with various documents. The State Tax officer intercepted and detained the goods. Therefore, GST MOV-02 was issued on the grounds that the address of delivery did not have a corresponding GSTIN or trade name. Henceforth, a detention order was also passed. The demand order was therefore issued in GST MOV-09 dated 19.07.2022 against which Writ Petition is filed. In other joint petition, it was further stated in the detention order that the documents accompanying the consignment were deficient. A show cause notice was issued dated 05.08.2022. In yet another petition, it petition being transporter was engaged in transportation of carbon electrodes to the Consignee. The consignment in this case was intercepted wherein it was alleged that there is discrepancy in E-way bill and other documents. Therefore, an order of demand and penalty was served upon assessee.
The transporter therefore submitted and argued that provisions of Section 129 of CGST Act, 2017 deals with “detention, seizure and release of goods and conveyance in transit” and permit the release of detained goods upon compliance with the conditions set out therein, would be equally applicable to transporter. Further it was argued that the statue permits not just owner butalso transporter to seek release of goods.
The revenue argued that the as per proviso to Section 129(6), the ‘conveyance’ shall be released on payment by the transporter of penalty or a sum of Rs.1,00,000/- whichever is less.
The Court stated that before passing final orders, it is to be analysed whether the provisions of referred sections apply in the present case or not. It was stated that the provisions of Section 129 of the Act apply only on the owner/agent/representative of the owner. Therefore, it was held that the legislature is conscious enough of the roles of the various persons involved in a transaction of carriage of goods such as the consignor/agents/representatives, the consignee/purchasers and transporter. The provisions of the Act are carefully sculpted. It was further stated that the proviso of the section extends the benefit to release conveyance by the transporter. Hence, transporter cannot seek release of goods. In case, the owner does not come forward to claim release of goods, the department can initiate action as it deems fit. Reliance was further placed on the decision of Apex Court in the case of Income Tax Officer, Cannanore Vs. M. K. Mohammed Kunhi.
The above decision by the Court is quite astonishing as it was presumed that the transporter can also seek release of goods in case of detention and seizure proceedings. The phrase used in section 129)1)(b) “where owner of the goods does not come forward for payment of such penalty” includes consignee, agent but does not include transporter was never comprehended. The reasoning adopted is the proviso to section 129(6) which states that conveyance shall be released on payment by the transporter of penalty under sub-section (3) or one lakh rupees, whichever is less. It appears irrational that the levy of penalty is dependent on value of goods/tax payable but the transporter is prohibited to seek release of goods.

Comments

GST Update No 291 on transporter cannot seek release of goods

Post a Comment

Query