The Calcutta High Court recently deleted the penalty of 100% imposed under Section 129(3) of the CGST Act, simply on the ground that the delivery location was not registered as an additional place of business, and directed the release of the bank guarantee furnished by the appellant, observing that the transportation of goods was fully supported by valid documentation and there was no intention to evade tax.
The Court found that the tax invoice and the E-Way Bill clearly revealed that there was absolutely no intention on the part of the appellant to evade payment of tax, which has been admitted by the appellate authority; however, the appellate authority did not set aside the penalty but reduced it.
The Division Bench comprising the Chief Justice T S Sivagnanam and Justice Chaitali Chatterjee (Das), noted that the documents, including the tax invoice, E-Way bill, stock transfer voucher, and transporter’s statement, clearly established the legitimacy of the transaction, and therefore, no penalty is warranted in the peculiar facts and circumstances of the case.
Finding that the appellate authority had also admitted that the appellant had produced the necessary documents, surprisingly in Form GST-MOV-01 as recorded by the State Tax Officer, Bureau of Investigation, the Bench set aside the orders of the adjudicating and appellate authorities in levying the huge penalty, and allowed the appeal in favour of the taxpayer.
Briefly, in this case, the petition arose from an appellate order passed under Section 107 of the WBGST/CGST Act, 2017, which had partly allowed the appellant’s appeal against a 200% penalty imposed under Section 129(3) of the CGST Act. The penalty was essentially levied for the alleged transportation of 219.70 kg of CR coil from Dankuni to Raiganj without proper documents.
The appellant asserted that all required documents, including the original invoice, E-Way bill, and stock transfer voucher, were duly produced at the time of interception, and that the consignment was being returned after job work from a third-party processor to the appellant’s registered premises. Despite acknowledging the documents, the appellate authority retained a 100% penalty on the ground that the delivery location was not registered as an additional place of business.
Appearances:
Advocates Himangshu Kumar Ray, Shiwani Shaw, Subhasis Podder, Gaurav Chakraborty, Animitra Roy, and Piyas Choudhury, for the Appellant/ Taxpayer
Advocates Amitabrata Roy, Tanoy Chakraborty, Sumita Shaw, and Saptak Sanyal, for the Respondent/ Revenue
