Facts of the Case

The petitioner, M/s Stanship Logistics Pvt. Ltd., a transporter registered under the CGST Act, was transporting a consignment of split air conditioners imported by its customer, M/s Blue Star Ltd. When the original e-way bill's truck broke down, a new vehicle was substituted on the e-way bill, but the truck was intercepted at Bhiwandi on 11.10.2019 and detained under Section 129(1) on the ground that the e-way bill's validity had expired. A show cause notice was issued to the petitioner, and an Order-in-Original dated 23.10.2019 confirmed a demand of Rs.10,09,154/- as IGST tax and an equal penalty against the petitioner. M/s Blue Star Ltd. deposited the aggregate amount of Rs.20,18,308/- to secure release of its goods, and this amount was later deducted from the petitioner's account by Blue Star. When the petitioner sought to appeal the Order-in-Original, the Appellate Authority refused to register the appeal, noting on the covering letter that since the payment had been made by Blue Star (the owner of the goods), the transporter could not file an appeal.

Issues Involved

  1. Whether a transporter, against whom a Section 129 detention order is passed, is the "aggrieved person" entitled to appeal, even though the tax and penalty were paid by the consignee/owner of the goods to secure their release.
  2. Whether the Appellate Authority can refuse to register an appeal on the ground that someone other than the appellant made the payment towards tax and penalty.

Petitioner's Arguments

  • The petitioner argued that the Order-in-Original imposing tax and penalty was passed against it, not against Blue Star Ltd., and that it is therefore the aggrieved person entitled to file the appeal, irrespective of who physically deposited the amount to secure release of the goods.
  • It was submitted that the payment made by Blue Star Ltd. was, in substance, made for and on behalf of the petitioner (since it was subsequently deducted from the petitioner's account with Blue Star), and there is no statutory provision requiring that only the person who deposited tax and penalty may file the appeal.

Respondent's Arguments

  • The Respondents supported the Appellate Authority's refusal to register the appeal but were unable to point to any statutory provision entitling the Appellate Authority to deny registration of an appeal from a person against whom the Order-in-Original was passed, merely because tax and penalty had been paid by a different person on the appellant's behalf.

Court Order / Findings

  • The Court held that the Order-in-Original was passed against the petitioner, and the fact that the goods were released to Blue Star Ltd. upon its payment (which was for and on behalf of the petitioner and was later recovered from the petitioner's account) did not shift the obligation or right to appeal to Blue Star Ltd.; the petitioner, being the person against whom the order was passed, is the aggrieved person entitled to file the appeal.
  • The Court noted that neither party could point to any statutory provision restricting the right to appeal only to the person who deposited the tax and penalty, where the order itself was passed against someone else.
  • The Appellate Authority's noting refusing to register the appeal was quashed, and the petitioner was directed to lodge the appeal manually within four weeks, challenging the Order-in-Original.
  • The Appellate Authority was directed to take the appeal on record and adjudicate it on merits without raising any objection as to limitation, since the petitioner had been bona fide pursuing the matter before the Court, and to decide the appeal expeditiously without costs.

Important Clarification

Under the GST detention and penalty regime (Section 129), the person against whom an Order-in-Original imposing tax and penalty is passed is the "aggrieved person" entitled to file a statutory appeal, regardless of whether a third party (such as the consignee/owner of the detained goods) made the actual payment to secure release of the goods, so long as that payment was effectively made for and on behalf of the person against whom the order stands.

Sections Involved

  • Section 129, CGST Act, 2017 — detention, seizure and release of goods and conveyances in transit for contraventions such as an expired e-way bill.
  • Section 107, CGST Act, 2017 — the general appellate provision under which the transporter's appeal was sought to be filed.
  • E-Way Bill Rules under the CGST Rules, 2017 — governing validity periods and permissible updates to e-way bill vehicle details.

Decision – In Favour of

The decision is in favour of the Assessee (the transporter-petitioner). The Appellate Authority was directed to register and decide the appeal on merits without a limitation objection.

Case Details

Court: High Court of Judicature at Bombay
Case No.: Writ Petition No.6744 of 2021
Coram: Justice G. S. Kulkarni and Justice Jitendra Jain
Date of Order: 11.09.2023

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