Whether serving order to driver of vehicle amounts to service to assessee?

PJ/Case Law/2020-2021/3625

JINDAL PIPES LTD. Versus STATE OF UTTAR PRADESH Writ Tax No. 1366 of 2019, decided on 20-1-2020
Brief Facts:Certain goods were being transported from Ghaziabad to Ghazipur by a transporter namely M/s. Pragati Logistic Private Limited. However, as in the E-Way bill, which was prepared by the consignor at Ghaziabad from where the goods were being transported, the distance between Ghaziabad and Ghazipur had been stated as 90 kilometers which was in fact 980 kilometers, proceedings were initiated. On 20-8-2018, when the goods after being intercepted by the Mobile Squad Officials at Kanpur were seized under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017, the petitioner deposited Rs. 9,15,802.85 and got its goods released. This amount was paid towards the Central Goods and Services Tax and State Goods and Services Tax along with the penalty. The tax imposed was Rs. 69,849.37 and the penalty under the CGST and SGST was Rs. 3,88,052.06 paise individually.
However, since under Section 129(1)(a), the consignor himself appeared and paid the amounts due, the penalty on 21-8-2018, when the order was passed, was reduced to Rs. 69,849.37 i.e. equal to the tax levied which was Rs. 69,849.37 paise. Therefore, on 21-8-2018, the total amount due against the petitioner was calculated as Rs. 2,79,397.48. However, when the petitioner filed an appeal against the order dated 21-8-2018 on 6-3-2019 under Section 107 of the Act and by the impugned order dated 20-8-2019, the appeal was dismissed as having been filed beyond the limitation prescribed, the instant writ petition was filed.
Issue: Whether serving order to driver of vehicle amounts to service to assessee?
Applicant contention:It had been admitted that order for depositing Rs. 2,79,397.48 was served upon the driver of the vehicle, Sri Narendra Kumar who was a driver of the transport agency and, therefore, the order was neither served on the consignee nor on the consignor. Learned Counsel relied upon a judgment of this Court reported in 2019 (21) G.S.T.L. 145: S/S Patel Hardware v. Commissioner of State wherein it has been specifically heldthat the order by which tax was levied and the penalty was imposed had to be served upon a person who was likely to be aggrieved by the order. It specifically holds that the driver was not a “person aggrieved” to whom the order ought to have been communicated and, therefore, the order definitely was not served upon a person who was likely to be aggrieved and, therefore, Learned Counsel for the petitioner submits that the appeal which was filed on 6-3-2019 was well within the limitation provided by Section 107 of the Act.
Authority contention:Learned Standing Counsel, however, in reply submitted that the service of the order on the driver Narendra Kumar (driver) was sufficient service and, therefore, the limitation for the filing of the appeal commenced on 20-8-2018 itself.
Reasoning of judgment:High court in the view that the order was served on the driver and, therefore, was definitely not served on a person who would have been aggrieved by the order and, therefore, the service on the driver was no service at all. The writ petition is, accordingly, allowed. The order dated 20-8-2019 is quashed. The appeal shall now be entertained as having been filed within the limitation provided under Section 107 of the Act.

Comment: The appeal before the first appellate authority is required to be filed within the stipulated period of three month from date of communication of order with condonation allowable upto one month. It has been affirmed by High Courts that the first appellate authority cannot condone the delay in filing appeal beyond the prescribed period. Moreover, determination of limitation revolves around date of communication of order to the assessee. The effective communication of order is important to the concerned assessee. In the above case, it was held that serving order to the driver of vehicle does not amount to communicating decision to the assessee and so the time limit for filing appeal would count from the actual date when the order was served to the assessee. This decision is appreciated particularly in the context that in past, it has been held that serving order to the authorized representative/employee etc. is proper communication of the decision to the assessee.
Prepared by- CA Kunal Karnawat

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PJ/Case Law/2020-2021/3625

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