The Telangana High Court directed that the authority must Refund the amount paid by the petitioner towards penalty on the pretext of noticing the wrong destination.
The vendor entrusted the goods to a transporter owning vehicle for transporting the goods from the vendor’s factory at Chegunta Village and Mandal, Medak District, Telangana State to the petitioner’s premises at Proddatur, Andhra Pradesh.
According to the petitioner, after entrusting the goods to the transporter, but before the petitioner received the goods, the petitioner got an order for the supply of the said goods from M/s. Laxmi Narasimha Constructions, Proddatur, and that he accordingly sold the same to the said buyer by raising tax invoice on the buyer and also generating e-Way Bill for transportation of the said goods from the petitioner’s business premises at Proddatur to the customer’s premises also at Proddatur.
According to the petitioner, the buyer requested the petitioner to deliver the goods directly to their shop work site, i.e., M/s. JVS Switchgear LLP at Katedan/Mailardevpally, Rajendranagar, Ranga Reddy District in the State of Telangana for converting into Electric Tower parts.
The petitioner alleges that in order to save transport expenditure and time in getting the goods transported to the petitioner’s premises at Proddatur, Andhra Pradesh and later on to the buyer’s premises also at Proddatur, Andhra Pradesh, and again transporting them to the Job work site in Telangana State, at the request of M/s. Laxmi Narasimha Constructions, Proddatur, the petitioner telephonically instructed the driver of the vehicle to take the goods to M/s JVS Switchgear LLP at Katedan/ Mailardevpally, Rajendranagar, Telangana State, stating that tax invoice and e-Way Bill generated by petitioner on the customer were also being sent.
The petitioner contended that even though the driver of the vehicle produced all documents such as Tax Invoice and e-Way Bill, on the ground that the said documents are for transporting the goods to Proddatur, Andhra Pradesh but the vehicle was proceeding to deliver the goods at Katedan, the respondent authority detained the same by issuing an order of detention in Form by mentioning the ground ‘wrong destination is noticed’.
The respondent authority issued notice to petitioner asking the petitioner to show cause within 7 days why tax under the Act along with penalty equal to tax to the tune of Rs.4,30,778 should not be recovered from the petitioner.
The transporter was pressurizing the petitioner to get his vehicle released, the petitioner paid under protest total tax and penalty amounting to Rs.4,30,778 demanded by the respondent authority and the goods and vehicle were released.
The division bench of Justice Ramachandra Rao and Justice Amarnath Goud while allowing the petition held that the action respondent authority in collecting the sum of Rs.4,30,778 from petitioner was arbitrary and violative of Articles 14 and 265 of the Constitution of India, and also the provisions of CGST Act, 2017 and TGST Act, 2017, and also the Circular CBEC / 20 / 16 / 03 / 2017 – GST dated September 14, 2018, issued by the Government of India.
Therefore, the court directed the respondent authority to refund the amount with interest at the rate of 6 % per annum from 30.01.2020 till the date of payment within 6 weeks.
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