The Calcutta High Court has held that the GST dept. cannot detain goods if quantity and weight match on physical verification.
The bench of Chief Justice T.S Sivagnanam and Justice Hiranmay Bhattacharyya has observed that the quantity or the weight of the goods, which were carried in the vehicle, has been found to be correct by the department on physical verification and there is no discrepancy. Apart from that gross description of the product as contained in the invoices also does not show any change of product carried in the vehicle.
The bench noted that the inspecting authority appears to have made a roving enquiry and went beyond the description of the goods as described in three invoices and has recorded information regarding the size of the pipe, shutter, TMT Bar which detail was not mentioned in the invoices. Therefore, the question of invoking Section 129 of the Act does not arise in the facts and circumstances of the case. That apart, the authority has not been able to pin pointedly show that the appellant had an intention to evade payment of tax.
The appellant/assessee challenged the show-cause notice, the unsigned summary of show-cause notice and the order of demand for tax and penalty, in GST Form MOV-09.
The issue raised was whether detention of goods, which were carried in a vehicle under the cover of three invoices, were different from the goods which were actually found in the vehicle during the course of inspection.
Yet another issue raised was whether there was an intent to evade payment of tax and whether the appellant/writ petitioner was guilty of suppression of facts with a view to evade payment of tax.
The court found that there is no split up details as regards the nature of the goods, which were carried but the broad classification has been mentioned in the invoices.
The court held that the order passed by the Appellate Authority affirming the order passed by the Original Authority and the penalty imposed on the appellant calls for interference. Accordingly, the appeal is allowed.
The court clarified that the appellant is at liberty to seek for refund of the pre- deposit which was made during the time of filing of the appeal.
The court directed the department to release the vehicle along with the goods within four days.
Case Details
Case Title: Ashok Sharma Vs. The State of West Bengal & Ors.
Case No.: FMA 136 of 2025 with CAN/1/2024
Date: 11.02.2025
Counsel For Appellant: Himangshu Kumar Ray
Counsel For Respondent: Anirban Ray
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