The petitioner is engaged in the business of manufacture and sales of tractors and their spares.
The petitioner dispatched 4 tractors to its Depot at Hyderabad under consignment and also issued e-way bill on the same day. The name of the consignor and consignee is the same and the address of the consignee is shown at Hayathnagar.
The respondent authority, however, detained the lorry on the ground that there was mismatch between the goods in movement and documents tendered and that there is also mismatch between e-way bill and goods in movement.
The petitioner submitted that there was only a stock transfer from it’s factory in Ranipet in the the State of Tamil Nadu to its Depot at Bongulur village, Ibrahimpatnam Mandal in the State of Telangana, that there is no element of sale of goods or services in it, and mere transfer of goods inter-State would not attract the provisions of the Act because there is no taxable event in it.
The division bench of Justice M.S. Ramachandra Rao and Justice T. Amarnath Goud held that there was no occasion for the respondent authority to collect tax and penalty from the petitioner on the pretext that there is illegality in the transport of goods as it would merely amount to stock transfer and there is no element of sale of goods or services in it.
The Court noted that in any event, now that respondent authority is made aware that petitioner has the principal Office at Tamil Nadu and principal place of business at Hayatnagar and additional place of business at Bongulur village, Ibrahimpatnam Mandal, the tax and penalty collected from the petitioner cannot be allowed to be retained by respondents.
Therefore, the court directed the respondent authority to refund within four weeks the sum of Rs.6,70,448collected towards CGST and State GST and penalty from the petitioner with interest at the rate of 9% per annum from March 5, 2020 till date of payment to petitioner by the respondents. The 3rd respondent shall also pay costs of Rs.1,500 to the petitioner.Subscribe Taxscan AdFree to view the Judgment