ORDER

The appellant has preferred the present appeal in Form GST APL-01 on 13-8-2018 against the order dated 4-5-2018 passed by Smt. Usha Guru, Asstt. Excise & Taxation Officer (Enf.)-cum-Proper Officer of State Tax, Panchkula under Section 129(3) of the Haryana Goods and Services Tax Act, 2017 [‘HGST Act’ in short] read with relevant provisions of Central Goods and Services Tax Act, 2017 [‘CGST Act’ for brevity] and Integrated Goods & Services Tax Act, 2017 [‘IGST Act’ in short]. In the case of detention/seizure of goods and conveyance in transit, the Proper Officer vide impugned order has calculated the tax amount at ₹ 70,454/- and penalty amount at ₹ 70,454/- totalling to ₹ 1,40,908/- which stands deposited by the appellant on 18-5-2018 vide CPIN No. 18050200001644.

2. However, in the present appeal case, the appellant submitted the original copy of impugned order along with appeal document instead of certified copy of order. In the meantime M/s. Asha Cargo Movers Pvt. Ltd., Delhi an appellant whose case was similar nature filed an appeal before the Hon’ble Punjab and Haryana High Court. Hence the case was kept pending till the decision of this case. But as per direction by the Hon’ble High Court in the case of titled as M/s. Asha Cargo Movers Pvt. Ltd., Delhi v. State of Haryana, CWP 31699 of 2018 decided vide order dated 24-7-2019, the orders were against the department, since the original copy of order is already available with the appeal document, so this case is taken up for hearing on merit after affording proper opportunity of being heard to the appellant. Both the sides have been heard in detail.

3. The impugned order dated 4-5-2018 was communicated to the appellant on 4-5-2018 and the present appeal has been preferred on 13-8-2018. As per Section 107 of the IGST/CGST Act the appellant has required to prefer an appeal within 90 days from the communication of impugned order, but the appellant filed an appeal on 13-8-2018 which is a nine days late. The appellant has submitted an application for condonation of delay which accepted and delay condoned. The appellant has also submitted original copy of impugned order dated 4-5-2018 in compliance of Rule 108(3) of the HGST Rules, 2017. Tax and penalty determined in the impugned order are disputed one and no amount of tax and penalty is admitted by the appellant. Since the appeal is in accordance with Section 107 of the HGST Act read with Rule 108 of the HGST Rules, the same is entertained for hearing on merits. Both the sides have been heard.

4. The brief facts of the case are that during the course of road-side checking on 1-5-2018 at 07:40 AM at Chandimandir (Panchkula) Smt. Usha Guru, AETQ (Enf.), Panchkula along with supporting staff intercepted a vehicle No. HR-1213-5275 and asked the driver-cum-person-in-charge to produce documents loaded of the goods in vehicle. After examination of the documents submitted by the driver-cum-person-in charge of the goods the Proper Officer observed the following deficiency :-

(1)     Part-B of E-way bill not filled. Whereas the goods were being moved/transported from the supplier/sending unit of HUL Baddi (HP) to the receiving unit HUL Rajpura Punjab.

(2)     In view of the above, the goods and the conveyance used for the movement of goods were detained under sub-section (1) of Section 129 of the Central Goods and Services Tax Act, 2017 read with sub-section (3) of Section 68 of the State/Union Territory Goods and Services Tax Act or under Section 20 of the Integrated Goods and Services Tax Act read with sub-section (3) of Section 68 of the Central Goods and Services Tax Act, 2017 by issuing an order of detention in FORM GST MOV-06 and the same was served on the person-in-charge of the conveyance on 1-5-2018.

E-way Bill No. 311011605082 was incomplete inasmuch as Part-B of E-way Bill was not filled/completed in gross negligence. The dealer has violated the provisions of Section 68 of CGST/HGST Act, 2017 and Rule 138 of CGST/HGST Rules, 2017 read with Section 20 of IGST Act, 2017. Hence, the proper officer issued show cause notice. The Proper Officer passed the impugned order dated 4-5-2018 creating demand of ₹ 1,40,908/- comprising tax of ₹ 70,454/- and penalty of ₹ 70,454/- under Section 20 of the IGST Act read with Section 129(1)(a) of the HGST/CGST Acts, which is the subject matter of present appeal.

5. Sh. Chetan Jain, Advocate for the appellant has assailed the impugned order on the following grounds :-

(A)    That the order passed by the Proper Officer is arbitrary in nature and the tax and penalty has been imposed without going into the merits of the case.

(B)    That the order of demand of Tax and Penalty passed by the Proper Officer is defective as the said order has been passed in the name of the transporter i.e. Nalagarh Truck Operator Union Nalagarh HP, person-in-charge of the conveyance being Sh. Gurpal Singh whereas it is crystal clear that both parts of E-way Bill i.e. Part-A and Part-B was filled in by the Consignor Company M/s. HUL Ltd. HP (Baddi). Thereafter, the interception of the goods notice in FORM GST MOV-07 was served on the person-in-charge of the Conveyance/ Vehicle Goods i.e. Mr. Harminder Singh, who is the concerned person of the Consignor Company and has nothing to do with the Transporter.

          And resultantly, in response to the notice when the person-in-charge, submitted the tax and penalty challan duly paid by the Consignor Company under the head Tax and Penalty, goods were released on the basis of the said challan.

          That from the perusal of the facts of the case and documents produced it seems that Proper Officer is herself not clear as to, on whom tax and penalty should be imposed and had wrongly passed the order of demand of Tax and Penalty GST MOV-09 in the name of the Transporter. It is worth mentioning here that even the GSTIN mentioned in the order is not correct and is unidentifiable.

          Without prejudice to the above grounds of appeal, the appellant further wants to plea that the order of demand of tax and penalty created is against the precedents already settled by various High Courts.

(C)    That reliance is placed on the recent judgment of M/s. Modern Traders v. State of UP and Ors., Writ Tax No. 763 of 2018, Order dated 9-5-2018 [2018 (14) G.S.T.L. 184 (All.)] (Annexed herewith as Annexure A-6) wherein the Hon’ble Allahabad High Court following its own order in the case of Axpress Logistics India Pvt. Ltd. v. Union of India and 3 others reported in [2018 (18) G.S.T.L. 794 (All.)] held that once E-way bill was generated after interception of the goods, but before seizure order is passed, then the goods cannot be seized i.e. once the E-way bill is produced and other documents clearly indicates that the goods are belonged to the registered dealer and the IGST has been charged there remains no justification in detaining and seizing the goods and asking the penalty.

          In the said case brief facts of the case was that the goods were being that the petitioner was a registered firm and is engaged in business of Iron and Steel goods, in U.P. certain goods of the aforesaid nature were sold to one M/s. Arjun Dev & Co., Delhi who is also a registered company against the Invoice No. 0003, dated 5-4-2018 after charging IGST @ 18%. The goods were handed over to the transporter who has loaded the same in a Vehicle No. UP 13 AT 1153 on 4-5-2018.

          While movement of the vehicle and when the vehicle crossed Yamuna Express Way it was intercepted by the respondent No. 3 Assistant Commissioner, State Tax, Mobile Squad, Unit-II, Noida at 01:30 a.m. on 5-5-2018 solely on the ground that the goods were not accompanied with E-way bill. The respondent No. 3 has proceeded for inspection/physical verification of the goods and for the same he has issued verification report in part-A and part-B on 5-5-2018 itself wherein no time has been mentioned. When the proprietor of the petitioner’s firm has received the information about interception of the vehicle, he has immediately generated E-way Bill on 5-5-2018 at 11:55 AM.

          The submission of the appellant counsel for the petitioner was that though the petitioner has furnished the E-way bill before the respondent No. 3 prior to the seizure proceedings and seizure order, but the respondent No. 3 has passed the seizure order. Again without mentioning the time of passing the seizure order a consequential notice under Section 129(3) of the UPGST Act (hereinafter referred to as the Act) was issued requiring the petitioner to deposit the tax as well as the penalty to the tune of ₹ 46,119/- each. An order under Section 129(3) was also passed on the same day i.e. 5-5-2018 in which no time has not been mentioned by the respondent No. 3. The said order was quashed.

          Similarly, in the present case in hand the Conveyance bearing No. HP-12B-5275 was intercepted on 1-5-2018 at 07:40 AM, and the E-way Bill (filled with PART-A) which was already in possession of the driver of the conveyance was completed by entering the details under PART-B on the same day i.e. 1-5-2018 at 08:55 AM i.e. much before the Detention Order in GST MOV-06 which was served on the person-in-charge on 2-5-2018.

          It is worth mentioning here that in the Notice/Memo issued in FORM GST MOV-07, the Proper Officer had not mentioned the date and time and directed to person-in-charge to appear on 7-5-2018 at 11:00 AM, whereas the order u/s. 129(3) has been passed on 4-5-2018 i.e. before the date of appearance which clearly shows that the Proper Officer, passed the orders without any physical verification being done.

          That in view of the above judgment relied upon, once E-way bill was generated after interception of the goods, but before seizure order is passed, then the goods cannot be seized.

          Therefore, both the impugned seizure/detention order as well as the order passed under Section 129(3) is completely without jurisdiction, arbitrary as such are nothing but clearly reflects misuse of power by the Proper Officer.

(D)    That the perusal of the order shows that the Proper Officer was bent upon imposing the penalty. That on the invoice Rate of IGST @ 18% was clearly mentioned, transaction being made from Himachal Pradesh to Punjab, and State of Haryana only being a Transit State. That there was no evasion of tax on the part of the Transport or either by the Consignor/Consignee Company as not filling of Part-B of the E-way Bill was mere a infraction of the procedural rules like Rule 138 of the GST Rules, in view of which penalty cannot be imposed. Reliance is placed on the judgment of Kerala High Court in the case of M/s. Indus Towers Limited v. The Assistant State Tax Officer and State Tax Officer (Intelligence) [2018 (11) G.S.T.L. 229 (Ker.)] (Annexed herewith as Annexure A-7) that the invocation of Section 129 can only be done when ingredients of Section 130 are present. It was held that :-

“A combined reading of Sections 129 and 130, especially the provision contained in sub-section (6) of the Section 129 indicates that the detention of the goods is contemplated under the statutes only when it is suspected that the goods are liable to confiscation. This aspect is seen clarified by the Central Board of Excise and Customs in the FAQs published by them on 31-3-2014 also. Section 130 dealing with the confiscation of goods indicates beyond doubt that the confiscation of goods is contemplated under the statutes only when a taxable supply is made otherwise than in accordance with the provisions contained in the statutes and the Rules made thereunder with the intent to evade payment of tax. If that be so, mere infraction of the procedural Rules like Rules 55 and 138 of the State GST Rules cannot result in detention of goods, though they may result in imposition of penalty. In other words, detention of goods merely for infraction of the procedural Rules in transactions which do not amount of taxable supply, is without jurisdiction.”

Hence detention of seizure under Section 129(1) and issuance of SCN under Section 129(3) in absence of intention to evade payment of tax is illegal and doesn’t justify the intention of Legislature to penalize the wilful defaulters.

6. On the other hands, Sh. Ajay Saini, Excise & Taxation Officer and Smt. Usha Guru, AETO (Enf.) have defended the impugned order. It has been contended that the order passed by the Proper Officer, is in accordance with the provisions of Act, self speaking and needs no interference. The respondent’s prayer is that the present appeal be dismissed being devoid of merits.

7. I have heard both the sides in extenso and perused the case file. I have equally deliberated towards facts of the case, provisions of the law. To decide the instant case judiciously, it is pertinent to reproduce and discuss relevant provisions of the Act ibid.

7.1 On 8-6-2017 Haryana Goods and Services Tax Act, 2017 was published in the Haryana Gazette and came into force w.e.f. 1-7-2017 to make provisions for levy and collection of tax on inter and intra-State supply of goods or services or both by the State of Haryana and the matter connected therewith and or incidental thereto. Section 68 of the Act provides for inspection of goods in movement, which reads as under :-

“(1)   The Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices, as may be prescribed.

(2)     The details of documents required to be carried under sub-section (1) shall be validated in such manner, as may be prescribed.

(3)     Where any conveyance referred to in sub-section (1) is intercepted by the proper officer at any place, he may require the person in charge of the said conveyance to produce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods.”

From perusal of the aforesaid provisions, it is clear that the government is empowered from in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed.

7.2 Rule 138 of the Rules, 2017 reads as under :-

“138. Information to be furnished prior to commencement of movement of goods and generation of e-way bill. – (1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees –

(i)      in relation to a supply; or

(ii)    for reasons other than supply; or

(iii)   due to inward supply from an unregistered person,

shall, before commencement of such movement furnish information relating to the said goods in Part A of FORM GST EWB-01, electronically, on the common portal.

(2) Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or by railway or by air or by vessel, the said person or the recipient may generate the e-way bill in FORM GST EWB-01 electronically on the common portal after furnishing information in Part B of FORM GST EWB-01.

(3) Where the e-way bill is not generated under sub-rule (2) and the goods are handed over to a transporter for transportation by road, the registered person shall furnish the information relating to the transporter in Part B of FORM GST EWB-01 on the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of the information furnished by the registered person in Part A of FORM GST ENB-01 :

Provided that the registered person or, as the case may be, the transporter may, at his option, generate and carry the e-way bill even if the value of the consignment is less than fifty thousand rupees :

Provided further that where the movement is caused by an unregistered person either in his own conveyance or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill in FORM GST EWB-01 on the common portal in the manner specified in this rule :

Provided also that where the goods are transported for a distance of less than ten kilometers within the State or Union territory from the place of business of the consignor to the place of business of the transporter for further transportation, the supplier or the transporter may not furnish the details of conveyance in Part B of FORM GST EWB-01.

Explanation 1. – For the purposes of this sub-rule, where the goods are supplied by an unregistered supplier to a recipient who is registered, the movement shall be said to be caused by such recipient if the recipient is known at the time of commencement of the movement of goods.

Explanation 2. – The information in Part A of FORM GST EWB-01 shall be furnished by the consignor or the recipient of the supply as consignee where the goods are transported by railways or by air or by vessel.

(4) Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal.

(5) Any transporter transferring goods from one conveyance to another in the course of transit shall, before such transfer and further movement of goods, update the details of conveyance in the e-way bill on the common portal in FORM GST EWB-01 :

Provided that where the goods are transported for a distance of less than ten kilometres within the State or Union territory from the place of business of the transporter finally to the place of business of the consignee, the details of conveyance may not be updated in the e-way bill.”

As per Rule 138 of the Rules, 2017, any registered person who causes movement of goods or assignment valuation exceeding ₹ 50,000/- must upload the information in a shape of e-way bill containing Part-A and Part-B. The appellant violated the provisions of Section 68 of the Act ibid and Rule 138 of the Rules framed thereunder.

7.3 Section 122 of the HGST/CGST Acts, 2017 deals with the issue of imposition of penalty for certain offences. The said section reads as under :-

“122. Penalty for certain offences. – (1) Where a taxable person who –

(i)      supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply;

(ii)    issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act or the rules made thereunder;

(iii)   collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(iv)   collects any tax in contravention of the provisions of this Act but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(v)     fails to deduct the tax in accordance with the provisions of sub-section (1) of section 51, or deducts an amount which is less than the amount required to be deducted under the said sub-section, or where he fails to pay to the Government under sub-section (2) thereof, the amount deducted as tax;

(vi)   fails to collect tax in accordance with the provisions of sub-section (1) of section 52, or collects an amount which is less than the amount required to be collected under the said sub-section or where he fails to pay to the Government the amount collected as tax under sub-section (3) of section 52;

(vii)  takes or utilises input tax credit without actual receipt of goods or services or both either fully or partially, in contravention of the provisions of this Act or the rules made thereunder;

(viii) fraudulently obtains refund of tax under this Act;

(ix)    takes or distributes input tax credit in contravention of section 20, or the rules made thereunder;

(x)     falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information or return with an intention to evade payment of tax due under this Act;

(xi)    is liable to be registered under this Act but fails to obtain registration;

(xii)  furnishes any false information with regard to registration particulars, either at the time of applying for registration, or subsequently;

(xiii) obstructs or prevents any officer in discharge of his duties under this Act;

(xiv) transports any taxable goods without the cover of documents as may be specified in this behalf;

(xv)   suppresses his turnover leading to evasion of tax under this Act;

(xvi) fails to keep, maintain or retain books of account and other documents in accordance with the provisions of this Act or the rules made thereunder;

(xvii)          fails to furnish information or documents called for by an officer in accordance with the provisions of this Act or the rules made thereunder or furnishes false information or documents during any proceedings under this Act;

(xviii) supplies, transports or stores any goods which he has reasons to believe are liable to confiscation under this Act;

(xix)  issues any invoice or document by using the registration number of another registered person;

(xx)   tampers with, or destroys any material evidence or documents;

(xxi)  disposes off or tampers with any goods that have been detained, seized, or attached under this Act,

he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded or the tax not deducted under Section 51 or short deducted or deducted but not paid to the Government or tax not collected under Section 52 or short collected or collected but not paid to the Government or input tax credit availed of or passed on or distributed irregularly, or the refund claimed fraudulently, whichever is higher.”

7.4 Relevant Section 129 of the Act, reads as under :-

“129 Detention, seizure and release of goods and conveyance in transit. – (1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released, –

(a)     on payment of the applicable tax and penalty equal to one hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty;

(b)     on payment of the applicable tax and penalty equal to the fifty per cent. of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty;

(c)     upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed :

Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.

(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances.

(3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c).

(4) No tax, interest or penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard.

(5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded.

(6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within seven days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130 :

Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days may be reduced by the proper officer.”

8. In any tax administration the provisions for Inspection, Search, Seizure and Arrest are provided to protect the interest of genuine taxpayers (as the tax evaders, by evading the tax, get an unfair advantage over the genuine taxpayers) and as a deterrent for tax evasion. These provisions are also required to safeguard Government’s legitimate dues. Thus, these provisions act as a deterrent and by checking evasion provide a level playing field to genuine taxpayers.

The statutory scheme is that Chapter XVI of the combined Acts deals with inspection, search, and seizure. Section 129 under Chapter XIX of the Acts provides the mechanism for detention, seizure, and release of goods and conveyances in transit. It begins with a non obstante clause and goes on to lay down the procedure. If any person transports or stores any goods contravening this Act or its rules, all those goods and means of transport and documents relating to those goods and conveyance will be detained or seized. They will, however, be released to the owner of the goods (a) on its paying the applicable tax and penalty equal to one hundred per cent. of tax payable on the goods. If the goods belong to an exempted category, a different rate applies, though.

If a person other than the owner – for example, a transporter – comes forward, it will have the goods released (b) on its paying the applicable tax and penalty equal to the fifty per cent. of the goods value reduced by the tax amount paid under each Act. Of course, the exempted goods do carry a different rate. Clause (c) of Section 129 permits the consignor or the other party to furnish a security equivalent to the amount payable under clause (a) or clause (b) “in such form and manner as may be prescribed.” The proviso to Section 129 of the Acts ensures the principles of natural justice : there will be no detention or seizure without the officer’s serving an order on the person transporting the goods.

And after considering the aggrieved person’s objections under sub-section (4), the officer passes another order, under sub-section (3), specifying the tax and penalty payable under clause (a), (b) or (c). Once the consignor or any other person pays the amount referred to in sub-section (1), all detention or seizure proceedings must stand concluded.

9. The Proper Officer has based her decision on the basis of the Part-B of the E-way Bill Bearing No. 311011605082 not filled by the appellant at the time of movement of the goods. However, the Proper Officer has not allowed the procedure mentioned/laid down by the Government vide Circular No. 41/15/2018-GST, dated 13-4-2018 as the Proper Officer not issued detention memo in FORM MOV-06 on 1-5-2018 at 07:40 AM when the conveyance was intercepted. The Proper Officer issued MOV-06 on 2-5-2018, however, the appellant has generated the Part-B of E-way bill at 08:55 AM on 1-5-2018, prior to issuance of detention memo i.e. MOV-06. The matter is squarely covered by the judgment delivered in the case of Modern Traders v. State of Uttar Pradesh, 763 of 2018, decided on 7-5-2018 –

The operative part of the judgment is as under :-

We find substance in the submission of the Learned Counsel for the petitioner. Once the E-way bill is produced and other documents clearly indicates that the goods are belongs to the registered dealer and the IGST has been charged there remains no justification in detaining and seizing the goods and asking the penalty.

In view of the aforesaid facts, we quash the seizure order dated 5-5-2018 as well as the consequential penalty order dated 5-5-2018. We direct the respondent no. 3 to immediately release the goods and vehicle in favour of the petitioner.

10. Further, in case of another judgment it has been observed by the Hon’ble Allahabad High Court (UP) that :-

In the case of Axpress Logistics India Pvt. Ltd. v. Union of India and 3 Others reported in Learned Counsel for the petitioner has submitted that the goods were intercepted at 1.30 AM on 5-5-2018 whereas the E-way Bill was generated on the same day at 11:55 AM which was furnished before the respondent No. 3 but reasons best known to the respondent No. 3 a seizure order and consequential penalty order has been passed. Counsel for the petitioner has submitted that once E-way bill was generated after interception of the goods, but before seizure order is passed, then the goods cannot be seized as is held by this Court in the case of Axpress Logistics India Pvt. Ltd. (supra). Counsel for the petitioner has also relied upon the circular dated 13-4-2018 issued by the Central Board of Direct Tax and Customs distinguish between interception and detention and hence in the instant case since the petitioner has furnished the E-way Bill prior to detention and seizure of goods, no seizure order can legally be passed nor penalty can be asked.

11. In the present case, the Proper Officer, Panchkula has imposed penalty on the ground that the goods in question were being transported without any proper and genuine document. The presumption was drawn in the matter for violation of law by not fill up the part-B of the E-way Bill in question. The checking officer has not considered the factual aspect of the matter before holding that there was violation of law. The documents produced by the driver-cum-person in-charge of the goods at the time of checking of the goods under dispute do not indicate that any attempt was made to evade tax. Record of case indicates that all the material particulars and information which were required and available in the documents, before issuing detention memo i.e. MOV-06 on 2-5-2018 by the Proper Officer, hence, no mala fide intention are proved or established. Under these circumstances, the question is whether penalty can be imposed only on the basis without establishing of mens rea or not for violation of law or attempt to evasion of tax.

12. In this regard, the principle laid down by the Apex Court in the case of Hindustan Steel Ltd., (1970) 25 STC 211 (SC) = 1978 (2) E.L.T. (J159) (S.C.) may be considered in paragraph 7 of the aforesaid judgment. The Hon’ble Supreme Court of India has held as under (page 214 in 25 STC) :

“…. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should for failure to perform a statutory obligation is matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute….”

If the facts and circumstances of the present case are evaluated in the backdrop of the aforesaid principles laid down by the Hon’ble Supreme Court in the case of matter of imposition of penalty, it would be seen that in the present case, penalty has been imposed mechanically without any dishonest intention or malice or mens rea having been established or proved.

13. With the above observations and findings, the impugned order dated 4-5-2018, imposing tax and penalty under Section 129(3) of the HGST/CGST/IGST Acts upon the appellant is hereby set aside. However, a penalty of ₹ 5,000/- imposed under Section 125 of the IGST/CGST Act for not mentioning the proper detail in the documents (i.e. E-way Bill).

14. The impugned order of Proper Officer is set aside and appeal is accepted accordingly. Issue summary of the order in Form GST APL-04 along with the appeal order.

Form GST APL-04

[See rules 113(1) & 115]

Summary of the demand after issue of order by the Appellate Authority, Tribunal or Court

Order No :-117/2019-20

Date of order : 21-11-2019

1. GSTIN/Temporary ID/UN –	02AAAAN114P1ZR
2. Name of the appellant –	M/s. Nalagarh Truck Operator Union, Nalagarh.
3. Address of the appellant –	Ward No. 8, Bilan Wali, Baddi (HP)
4. Order appealed agains –	Smt. Usha Gura, AETO (Enf.)-Cum-Proper Officer, Panchkula
5. Appeal no.	046/2018-19, dated 13-8-2018
6. Personal Hearing –	20-12-2018, 10-1-2019, 8-8-2019 & 21-11-2019
7. Order in brief –	Appeal Accepted
8. Status of order –	Confirmed
9. Amount of demand confirmed –

 

 

Place : Panchkula
Date : 21-11-2019	Rameshwar Mehra
	Additional Commissioner of State Tax (Appeals)-cum-Appellate Authority, Haryana, Panchkula