Madras High Court

Thiruchy Royal Steels vs The Deputy State Tax Officer on 11 May, 2023

                                                                             W.P.No.15338 of 2023

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                DATED: 11.05.2023

                                                       CORAM:

                                   THE HONOURABLE MR. JUSTICE P.B. BALAJI

                                               W.P.No.15338 of 2023
                                        and W.M.P.Nos.14861 & 14863 of 2023

                     Thiruchy Royal Steels,
                     A Proprietorship Concern
                     Represented by its Proprietor
                     Mr.Jahir Hussain Mohamed Riyaz,
                     No.18, Heber Road,
                     Beemanagar,
                     Tiruchirappalli – 620 001.                               ... Petitioner

                                                        Vs.

                     1.The Deputy State Tax Officer,
                       Roving Squad – 3,
                       Salem,
                       Tamil Nadu.

                     2.The State Tax Officer,
                       Adjudication – 2,
                       Salem (Intelligence)
                       Salem, Tamil Nadu.                                     ... Respondents


                     PRAYER: Writ Petition filed under Article 226 of the Constitution of

                     India, praying to issue a Writ of Certiorari, calling for the records from

                     the file of second respondent in the impugned proceedings in ADJ

                     1/8
https://www.mhc.tn.gov.in/judis
                                                                                    W.P.No.15338 of 2023

                     No.04/2023-24/Adjudication-2 dated 08.05.2023 and Form GST MOV-

                     09- Order of Demand of Tax and Penalty in GST MOV Order

                     No.04/2023-24/Adjudication-2 dated 08.05.2023 and quash the same as

                     illegal, arbitrary and void ab initio.

                                        For Petitioner     : Mr.B. Sivaraman

                                        For Respondents : Mr.V. Prasanth Kiran,
                                                          Government Advocate (Tax)


                                                           ORDER

With the consent of both the parties, the Writ Petition is taken up

for final disposal at the admission stage itself.

2. The above Writ Petition has been filed challenging the

impugned proceedings in ADJ No.04/2023-24/Adjudication-2 dated

08.05.2023 and Form GST MOV-09- Order of Demand of Tax and

Penalty in GST MOV Order No.04/2023-24/Adjudication-2 dated

08.05.2023, on the file of the second respondent and to quash the same,

as illegal, arbitrary and void ab initio, by issuance of Writ of Certiorari.

https://www.mhc.tn.gov.in/judis W.P.No.15338 of 2023

3. The case of the writ petitioner is that he is a registered dealer

under the Goods and Service Tax Act, 2017 (hereinafter referred to as

'the GST Act'). In the course of business, he had entered into a

transaction with a Company in Salem (Consignor) for supply of goods

directly to be delivered as per the directions of the customer, namely,

SRM Steels at Chennai, to a registered dealer, as per the provisions of the

GST Act 2017. The said registered dealer is stated to be one ARM Steel

House, having their business at Thindivanam, Tamil Nadu. It is the case

of the writ petitioner that the address, as well as GSTIN/UIN details are

clearly mentioned in all the tax invoices and e-way bills and the

transaction was arranged as a 'Bill to' – 'Ship to'. However, the first

respondent intercepted the goods vehicle on 26.04.2023 at Salem, as per

the statement recorded from the driver of the vehicle. The physical

verification was conducted on the same day and there was no mismatch

with regard to the quantity of the goods carried in the vehicle despite the

driver furnishing the Sales E-Invoices, E-Way Bills. The first respondent

issued an order of detention under Section 129(1) of the GST Act, on the

ground of mismatch of delivery address. Thereafter, the first respondent

issued a notice under Section 129(3) of the GST Act and levied a total

https://www.mhc.tn.gov.in/judis W.P.No.15338 of 2023

penalty of Rs.3,51,000/-, called for objections from the writ petitioner

and on 08.05.2023, an opportunity of personal hearing was also afforded

to the writ petitioner. Admittedly, the writ petitioner filed his detailed

objection on 02.05.2023 and after considering all relevant materials

available, the impugned order came to be passed by the second

respondent, which is under challenge in the present Writ Petition.

4. Heard Mr.B. Sivaraman, learned counsel for the petitioner and

Mr.V. Prasanth Kiran, learned Government Advocate (Tax), appearing for

the respondents.

5. The learned Government Advocate appearing for the

respondents brought the attention of this Court to the order passed by this

Court in WP.No.4217 of 2023 dated 13.02.2023. In almost similar set of

facts, this Court directed the writ petitioner therein, to avail all the

alternate remedies available under Section 107 of the GST Act. This

Court also took a note of the procedure and remedy available to the writ

petitioner, to seek provisional relief of vehicle invoking Section 129(1)

of the GST Act.

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6. The learned counsel for the petitioner placed reliance on the

judgment of this Court dated 04.11.2022 passed in WP.No.29281 of

2022. According to the learned counsel for the petitioner, the facts in the

said Writ Petition were almost identical to the facts of the present case

and this Court had quashed the impugned order and released the detained

consignment forthwith.

7. This Court has carefully gone into both the orders referred to by

the learned counsels, one in WP.No.4217 of 2023 and the other in

WP.No.29281 of 2022. The facts in WP.No.4217 of 2023, squarely

applies to the facts of the present case. In fact, the second respondent has

adverted to all the objections raised by the writ petitioner and answered

the same as these are the disputed questions of facts, which cannot be

gone into in the Writ Petition under Article 226 of the Constitution of

India, especially when the alternate remedy is available under Section

107 of the GST Act.

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8. In the light of the above observation, the Writ Petition stands

disposed of by issuing the following directions:-

a) The petitioner is given liberty to file a statutory

appeal, within a period of ten (10) days from the date of

receipt of a copy of this order and on receipt of the said

statutory appeal within 10 days, the Statutory Appellate

Authority shall decide the appeal on merits and in

accordance with law and shall not put a limitation in filing

the appeal against the Writ Petition.

b) The petitioner is also given liberty to move an

application under Section 129(1) of the GST Act, seeking

for provisional release of the goods and the vehicle, which

have been detained.

c) When such application is moved, the Appropriate

Authority shall take up the interim application forthwith

and pass orders within a period of one week thereafter.

The Statutory Appellate Authority may also consider

releasing of goods and vehicle on putting the petitioner on

terms, as the petitioner has already expressed his

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willingness to furnish even a bank guarantee for the entire

penalty amount to them, without prejudice to the rights in

the main appeal. The Appellate Authority shall dispose of

the appeal, within a period of four (4) weeks.

d) It is made clear that the order passed on the

application made by the petitioner under Section 129(6) of

the GST Act, shall be taken up on an emergent basis and

shall be disposed of without any delay, expeditiously.