In a significant ruling, the Karnataka High Court upheld the Goods and Services Tax ( GST ) demand and penalty for the clandestine movement of goods, stating that freedom of movement was not an absolute right.
This intra-Court appeal challenged a Single Judge’s order dated June 23, 2022, which favored the respondent’s W.P.No.7226/2022 (T-RES) by quashing the obligation to pay tax and penalty and directing the release of the vehicle in question.
The Additional Government Advocate ( AGA ) representing the assessee vehemently argued that the carrier of subject goods had furnished the movement particulars of the vehicle in advance in terms of lex mercatoria to the Department; goods carried in the conveyance originated from various consigners from Mumbai, consignees being in several places in Bengaluru city limits; however, the conveyance was intersected by the CTO at Bommasandra Industrial Area which is more than 20 kms away from the outer limits of City; thus, the goods conveyance having moved in a different direction altogether than was impressed to the department and the same being not authorized by the transit documents in question, the authorities rightly treated the case as one of ‘transportation of goods without documents beyond the place of destination and also diversion of the goods to a place other than the destination point’.
He also said that both the original authority & the Appellate Authority had looked into the matter and therefore, the same did not merit a deeper examination at the hands of learned Single Judge, scope of writ jurisdiction being restrictive.
It was the vehement argument of AGA that the movement particulars in terms of lex mercatoria were furnished in writing by the consignor/conveyor of the goods specifically mentioning the point of origin, route & the destination points of the consignees, all that has been apparently breached unjustifiably inasmuch as the conveyor traveled astray qua the route map furnished and that amounted to carrying the goods without the requisite.
The CTO issued an order under Section 129(3) of the Act, confirming a tax liability of Rs. 3, 25,423/- and a penalty of Rs. 21, 41,239/-, directing the respondent to make the payment immediately. The respondent appealed at the departmental level, but the appeal was rejected by an order dated 10.03.2022. Subsequently, the respondent filed W.P. No. 7226/2022 (T-RES), which was decided in their favor by a Single Judge, leading to this appeal by the State.
This case also involved the fundamental right to trade & business guaranteed under Section 19(1) (g) read with Article 301 of the Constitution. Therefore, it will have elements of right to movement, as well. It is open to a trader to take goods to the destination point in whichever route he opts, unless the law otherwise requires, destination point being intact. Such a right needs to be recognized as of necessity to trade or business.
Freedom of movement, mobility rights, or the right to travel is a human rights concept encompassing the right of individuals to travel from place to place within the territory of a country, and to leave the country and return to it. The right includes not only visiting places, but changing the place where the individual resides or works. The Coram of Justice Krishna S Dixit and Justice Ramachandra D noted that the new legal regime has eliminated the previous requirement for furnishing travel and other particulars; consequently, the orders of liability and penalty, which were quashed by the Single Judge, cannot be reinstated by setting aside his judgment. This Appeal being devoid of merits was liable to be and accordingly dismissed
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