The Calcutta High Court has held that an authority is lawfully permitted to impose a penalty and SGST under Section 129 of the Goods and Services Act if the goods are found to be detained in the territory of the State.

A Single Bench of Justice Bibek Chaudhari observed, “… the respondent authority is lawfully permitted to impose penalty under Section 129 as well as the SGST as the goods were found to be detained in the territory of the State. In view of such circumstances, the ratio laid down in M/s Hanuman Ganga Hydroprojects Private Limited (supra) and Ashok Kumar Sureka (supra) are not applicable in the instant case.”

The petitioner, in this case, had challenged the imposition of SGST and penalty passed by the Assistant Commissioner, Bureau of Investigation (North Bengal) Headquarter.

Advocates Jagriti Mishra and Subham Gupta appeared for the petitioner while Advocates Subir Kumar Saha and Bikramaditya Ghosh appeared for the State.

Brief Facts

The petitioner was the manufacturer and supplier of milestone Bitumen Emulsion and Allied products and was a Registered Taxable Person duly registered under the GST Act with a specific GSTIN number. In course of business, he supplied the goods and for the purpose of transporting the said goods, he paid IGST at the rate of 18% amounting to Rs. 2,58,804/-. On payment of IGST, an E-Way bill was generated for the transportation of the said goods from Begusarai to Guwahati.

The good carriage suffered from a breakdown and got detained in a motor vehicle garage within the jurisdiction of Jalpaiguri. The Assistant Commissioner imposed SGST and a penalty on SGST to the tune of Rs. 7,18,900/- and asked the petitioner to pay the said tax with a penalty. In order to release the vehicle, the petitioner had to pay the tax and hence preferred an appeal before the appellate authority but the same got dismissed.

The High Court in the above context asserted, “Section 129 of the Central Goods and Services Tax Act, 2017 empowers the statutory authority to detain the vehicle and seize the goods. The goods shall be released only on payment of penalty equal to 200% of the tax payable on such goods.”

Accordingly, the Court dismissed the writ petition.

Cause Title- Ashok and Sons (HUF) v. Joint Commissioner, State Tax, Office of the Senior Joint Commissioner, Siliguri Circle & Ors.

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