A two-judge bench of the Gujarat High Court comprising Justice Harsha Devani and Justice Bhargav D Karia has held that the GST department cannot detain the goods on ground of defect in E-way Bill as there is no supply.
The GST department, in the present case, had released the goods belongs to the petitioners on the ground of absence of Part-B of E-way bills. Later, the demand and penalty were raised. In rejecting the petitioner’s request to release the goods, the department directed them to make payment of tax and 100% penalty within seven days from the date of the order and recorded that in case of failure of payment of tax and penalty, action under section 130 of the GST Acts would be initiated.
The division bench observed that the basis for computing the additional tax is the IGST paid by the petitioners.
“Moreover, in the impugned order there is not even a whisper as regards the submissions advanced on behalf of the petitioners, nor have the same been dealt with in the body of the order. No reasons have been assigned by the second respondent for the purpose of holding the petitioner liable to payment of tax and penalty despite the fact that IGST had already been paid on such transaction and the goods were being moved from the customs warehouse to the petitioner’s own godown and it being the case of the petitioners that there was no supply, and hence, the provisions of GST Act are not applicable. The impugned order is, therefore, totally bereft of any reasoning,” the bench observed.
It was further held that in the absence of any reasons in support of the tax and penalty levied by the second respondent, the impugned order stands vitiated as being an unreasoned order and as such cannot be sustained.
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