Justice Dama Seshadri Naidu of Kerala HC ordered released of detained goods if the tax payer has assessed the tax as per his knowledge and that the mistake made in not with any mala-fide intention.
In this case of N.V.K.MohammedSulthanRawther and Sons& Ors. v/s Union of India& Ors. held that detention of the goods u/s 129 of the GST cannot be resorted to when the dispute is bona fide.
The present case arose when the consignment of the petitioner that contained betel nuts was detained by the alleging that the attracts 18% tax and not 5% as it comes under the description of "HSN 2106" . The Assistant State Tax Officer alleged that the tax stated in the tax invoice was 5% however the product comes under the tax slab of 18%. Aggrieved by the order of ASTO he - the petitioner filed a writ in Kerala HC and sought direction to be issued to ASTO that to not detain the petitionersen- routecommodity.
The petitioners Advocate contested thatthe tax rate dispute was not a matter for adjudication in a proceeding under Section 68 or 129 of the GST Act& that this matter of adjudication is to be undertaken by the assessing officer alone.
On the other hand the revenue department argued that Assistant State Tax Officerhas unrestricted powers u/s 129 to intercept any goods and detain them on any ground enumerated in that section. In this case it was contested that there is misbranding of the product and paying less tax and hence there is no illegality in detaining the petitioner's goods.
On hearing the both sides, the court held that detention order was arbitrary in nature and that petitioner's goods to be released at once. On the basis of several precedents, the court further held that "if a dealer furnishes all particulars about his business, assesses the tax as he honestly believes to be correct, and pays it; his conduct cannot be faulted as mala fide or as an effort to evade tax".
Courtesy/By: Mayank Agarwal
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12 Jan 2019
