Facts of the Case

The petitioner, M/s GMT Industries Ltd., engaged in the manufacture and supply of Tube Mill Equipments, dispatched goods from Faridabad, Haryana to Tata Steel Ltd., Jamshedpur under a valid tax invoice and E-Way Bill. During transit, the vehicle was intercepted by the State Tax authorities at Jamshedpur. The authorities alleged that the E-Way Bill had been cancelled during transit and detained the vehicle.

Proceedings under Section 129 of the GST Act were initiated, and tax along with penalty amounting to ₹13,68,000 was imposed. To secure the release of the goods and vehicle, the petitioner deposited the amount under protest. The petitioner challenged both the jurisdiction of the State Tax Officer to initiate proceedings in an inter-State transaction and the legality of the detention and penalty order.

 

Issues Involved

  1. Whether the State Tax Officer had jurisdiction to initiate proceedings under Section 129 of the GST Act in respect of an inter-State supply governed by the IGST Act.
  2. Whether tax and penalty could be imposed merely because the E-Way Bill was cancelled during transit without any finding of tax evasion.
  3. Whether the petitioner should be relegated to the statutory appellate remedy under Section 107 of the JGST Act.

 

Petitioner’s Arguments

  • The transaction was an inter-State supply, and therefore proceedings ought to have been undertaken in accordance with the provisions applicable under the IGST Act read with the CGST Act.
  • The State Tax Officer lacked jurisdiction to conduct proceedings under Section 129 in respect of the inter-State movement of goods.
  • The goods were fully tax-paid, and there was no allegation or finding of tax evasion.
  • The E-Way Bill was allegedly cancelled during transit without the knowledge of the petitioner.
  • The penalty order was passed without supplying a copy of the order to the petitioner.
  • A temporary GST registration was created in the name of the truck driver, which prevented the petitioner from effectively filing an appeal after the temporary registration expired.
  • The amount was deposited only under protest to obtain release of the detained goods and vehicle.

 

Respondent’s Arguments

  • The State contended that the writ petition was not maintainable because an effective statutory remedy of appeal was available under Section 107 of the JGST Act.
  • Since the dispute involved questions of fact, the petitioner should first approach the appellate authority instead of invoking the writ jurisdiction of the High Court.

 

Court Order / Findings

The Jharkhand High Court observed that an effective alternative remedy by way of appeal under Section 107 of the JGST Act was available to the petitioner.

Accordingly, the Court:

  • Granted liberty to the petitioner to file an appeal before the appellate authority.
  • Directed the State Tax Officer to provide the necessary GSTIN details to enable the petitioner to file the appeal online.
  • Clarified that if the online filing was not possible due to technical reasons, the petitioner would be permitted to file the appeal manually.
  • Allowed the petitioner to raise all factual and legal issues before the appellate authority.
  • Clarified that it had not examined the merits of the controversy and disposed of the writ petition accordingly.

 

Important Clarification

  • Availability of an effective statutory appellate remedy ordinarily prevents the High Court from entertaining a writ petition.
  • The appellate authority must consider all legal and factual issues independently.
  • Technical difficulties in filing GST appeals should not deprive an assessee of the statutory right of appeal.
  • The High Court may direct the tax authorities to facilitate filing of an appeal where procedural issues exist, without expressing any opinion on the merits of the dispute.

Sections Involved

  • Section 129 of the Central Goods and Services Tax Act, 2017
  • Section 107 of the Jharkhand Goods and Services Tax Act, 2017
  • Section 20 of the Integrated Goods and Services Tax Act, 2017
  • GST MOV-02
  • GST MOV-06
  • GST MOV-07
  • GST MOV-09
  • GST DRC-07

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1782969590_82compressed.pdf

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