The Kerala High Court held that the Appellate Authority under the Goods and Service Tax Act, 2017 (GST Act) is empowered to make further enquiry after deciding that order is erroneous.
The present writ petition has been filed challenging the appellate order passed by the Joint Commissioner (appeals) under the provisions of Central Goods and Services Tax / State Goods and Service Tax Act 2017 (‘the CGST / SGST Act’ for short) and Rules made thereunder.
The State Tax Officer, Squad No.1 SGST Department Ernakulam, while conducting vehicle checking on 07.09.2021, received intimation from the Railway Protection Force, Ernakulam regarding the transport of gold by Mr. Nikhil Suresh without any documents as required under the provisions of CGST / SGST Act. On inspection, the carrier failed to produce documents to prove the genuineness of the gold ornaments under the transportation.
The State Tax Officer finalised the order of confiscation under Section 130 of the GST Act. The State Tax Officer held that there were no valid documents in respect of the gold ornaments transported at the time of detention. The State Tax Officer rejected the argument of the respondent that the soft copies of the bills were available with the carrier.
Mohammed Rafiq, Special Government Pleader submitted that Section 109 of the CGST/ SGST Act provides for the setting up of Tribunal to entertain appeals that can be filed under Section 112 from the first appellate orders. However, such a Tribunal is not yet constituted, and therefore, the petitioner has no other remedy than to approach this Court seeking to invoke its powers under Article 226 of the Constitution of India.
The counsel for the respondent Tomson T Emmanual submitted that the comma before the phrase ‘such fine as the said officer thinks fit’ could be seen as the setting of a non-restrictive or parenthetical element. Omitting the comma treats the entire phrase ‘To pay in lieu of confiscation such fine as the said officer thinks fit’ as a single and cohesive unit. This approach suggest that the discretionary nature of the fine is directly and inseparably linked to the option to pay a fine instead of undergoing confiscation.
A Single Bench of Justice Dinesh Kumar Singh observed that “The appellate authority is empowered to make further enquiry after deciding that the impugned order is erroneous, such enquiry must be to decide the issue in appeal. From the reading of subsection (11), it is evident that the appellate authority has ample power to decide the issue afresh and make enquiry to decide the issue in appeal. In view of the provisions of the Act, it would be difficult to say that the appellate authority has no jurisdiction to interfere with the discretion exercised by the adjudicating authority in imposing the fine in lieu of the confiscation of the goods other than the market value of the goods.”
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