Facts of the Case

M/s. Rimjhim Ispat Limited challenged an order dated 15.02.2021 imposing tax and penalty of Rs.19,61,100 for an expired e-way bill on a consignment of stainless steel rod being transported from Howrah to a buyer, GEE Limited. The e-way bill, valid from 04.02.2021 to 10.02.2021, had expired by the time the vehicle was checked entering Jharkhand at Dhanbad, leading to detention under Form GST MOV-01/02, a show cause notice in Form GST MOV-07, and eventually an order imposing tax and penalty under Section 129. The petitioner argued that since the transaction was an inter-state supply governed by the IGST Act, 2017 (via Section 20 of that Act), a State Tax officer was not the 'proper officer' competent to conduct proceedings and impose penalty under Section 129(1) and (3) of the CGST Act. The petitioner had also filed a manual appeal against the order, which was not being processed online, and the appellate authority had directed it to file online instead.

Issues Involved

  1. Whether an officer of the State Tax department was competent, as 'proper officer', to pass an order under Section 129 in respect of what the petitioner characterised as an inter-state (IGST) transaction.
  2. Whether the petitioner's manually filed appeal, left pending/unprocessed by the department, should be directed to be decided, in preference to the Court examining the jurisdictional question itself.

Petitioner's Arguments

  • The transaction, being an inter-state supply, fell within the ambit of the Integrated Goods and Services Tax Act, 2017, and a State Taxes officer could not have carried out proceedings under Section 129(1) and (3) of the CGST Act, since he was not the 'proper officer' for such a transaction in view of Section 20 of the IGST Act.
  • The order imposing tax and penalty of Rs.19,61,100 should be quashed since it was based merely on expiry of the e-way bill's validity, without any finding of actual tax evasion.
  • At the hearing, however, the petitioner's counsel did not press the jurisdictional prayer, and instead relied on the merits of the appeal, and on a precedent (W.P.(T) No. 1823 of 2021) dealing with the department's failure to process a similarly-filed manual appeal.

Respondent's Arguments

  • Learned counsel for CGST relied on a copy of the order passed in W.P.(T) No. 1823 of 2021, which primarily dealt with the filing of an appeal in similar circumstances and directed the taxpayer to the appellate remedy under Section 107, without the High Court going into the jurisdiction question.

Court Order / Findings

  • The Court noted that the petitioner's counsel was not pressing the jurisdictional prayer (proper-officer/IGST point), and instead recorded that, since the petitioner had an efficacious alternative remedy of appeal under Section 107 of the JGST Act — which it had already availed by filing an appeal manually, currently lying dormant with the department — the appropriate course was to direct the appellate authority to decide that appeal.
  • The writ application was disposed of with a direction to the Joint Commissioner (Appeals), Dhanbad Division, to dispose of the manually-filed appeal expeditiously, preferably within eight weeks, based on the grounds already raised in the memo of appeal.
  • The Court expressly did not go into or decide the CGST-vs-IGST proper-officer jurisdiction question on merits — that and all other grounds raised in the appeal were left to be decided by the appellate authority.

Important Clarification

This order leaves open — rather than resolves — an important and recurring question in e-way-bill enforcement: whether a State GST officer can act as 'proper officer' to levy tax and penalty on what is claimed to be an inter-state (IGST) supply. Businesses facing a similar objection should not treat this order as authority either way on that jurisdictional point; it was expressly not decided here, and the petitioner's manual appeal — where the point can still be argued — was simply directed to be taken up and decided by the appellate authority.

Sections Involved

  • Section 129, Central Goods and Services Tax Act, 2017 — detention, seizure and release of goods and conveyances in transit.
  • Section 20, Integrated Goods and Services Tax Act, 2017 — application of certain CGST Act provisions to IGST, including proper-officer designation.
  • Section 107, Jharkhand Goods and Services Tax Act, 2017 — appeals to the Appellate Authority.

Decision – In Favour of

Disposed of without a decision on merits — the jurisdictional (CGST vs. IGST proper-officer) question was left open, and the petitioner was directed to the appellate remedy which it had already invoked manually.

Case Details

  • Court: High Court of Jharkhand at Ranchi
  • Case No.: W.P.(T) No. 4574 of 2021
  • Coram: Hon'ble Mr. Justice Rongon Mukhopadhyay and Hon'ble Mr. Justice Deepak Roshan
  • Date of Order: 1 May 2023

Link to Download the Order

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