For Detention and Seizure of the Goods Intention to Evade Tax has to be SeenAkhilesh Kumar Sah

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The Tax Publishers GST--Detention of Goods For Detention and Seizure of the Goods Intention to Evade Tax has to be Seen Akhilesh Kumar Sah Intention to evade tax or mala fide intention has to be seen before seizure or detention under section 129 of CGST/SGST Act. With the help of some recent decisions, the issue is resolved. 1. A recent case before Calcutta High Court In Tiwari Furniture v. State of West Bengal and Ors. (WPA 365 of 2024) decided by the Calcutta High Court on 11-3-2024, the petitioner purchased scrap from one, Abhigyan Hardware, Assam. The seller paid the tax for the said goods. The goods were transported to the petitioner's office at West Bengal by the transporter. The petitioner had all the documents. The goods were intercepted by the respondent (No. 2). Despite the fact that the driver of the vehicle provided all the necessary documents, the respondent (No. 2) conducted the physical verification of the said vehicle. During the physical verification, there was no mismatch in the quantity of the goods as mentioned in the document. The only reason the respondent (no.2) had detained the goods was that the address of the consigner was not found during the inspection carried out at his place of business. Citing the said reasons, the respondent passed the detention order imposing penalty on the petitioner. The petitioner paid the said penalty and got the goods released. The petitioner file a writ petition challenging the order and refund of the amount deposited. (i) Submissions made by the counsel for petitioner in brief Counsel for the petitioner submitted that for invoking the proceeding under section 129(3) of the CGST Act, the intent to evade payment of tax was mandatory. The petitioner had already paid tax and the respondent ought not to have initiated proceedings under section 129(3) of the CGST Act. Counsel for the petitioner relied on a decision of a Co-Ordinate Bench of Calcutta High Court in Fairdeal Metals Ltd. v. Assistant Commissioner of Revenue, State Tax, Bureau of Investigation (NB) [(2024) 159 taxmann.com 158]. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--Detention of Goods

For Detention and Seizure of the Goods Intention to Evade Tax has to be Seen

Akhilesh Kumar Sah

Intention to evade tax or mala fide intention has to be seen before seizure or detention under section 129 of CGST/SGST Act. With the help of some recent decisions, the issue is resolved.

1. A recent case before Calcutta High Court

In Tiwari Furniture v. State of West Bengal and Ors. (WPA 365 of 2024) decided by the Calcutta High Court on 11-3-2024, the petitioner purchased scrap from one, Abhigyan Hardware, Assam. The seller paid the tax for the said goods. The goods were transported to the petitioner's office at West Bengal by the transporter. The petitioner had all the documents. The goods were intercepted by the respondent (No. 2). Despite the fact that the driver of the vehicle provided all the necessary documents, the respondent (No. 2) conducted the physical verification of the said vehicle. During the physical verification, there was no mismatch in the quantity of the goods as mentioned in the document. The only reason the respondent (no.2) had detained the goods was that the address of the consigner was not found during the inspection carried out at his place of business. Citing the said reasons, the respondent passed the detention order imposing penalty on the petitioner. The petitioner paid the said penalty and got the goods released. The petitioner file a writ petition challenging the order and refund of the amount deposited.

(i) Submissions made by the counsel for petitioner in brief

Counsel for the petitioner submitted that for invoking the proceeding under section 129(3) of the CGST Act, the intent to evade payment of tax was mandatory. The petitioner had already paid tax and the respondent ought not to have initiated proceedings under section 129(3) of the CGST Act. Counsel for the petitioner relied on a decision of a Co-Ordinate Bench of Calcutta High Court in Fairdeal Metals Ltd. v. Assistant Commissioner of Revenue, State Tax, Bureau of Investigation (NB) [(2024) 159 taxmann.com 158].