Letter for illegal seizure of vehicles ! FORM GST MOV-02

The Hon’ble Punjab and Haryana High Court in M/s. Shiv Enterprises v. State of Punjab and others [CWP-18392-2021 dated February 04, 2022] held that, GST Authorities cannot detain goods in conveyance without passing appropriate orders if goods are accompanied with the documents as prescribed and cannot proceed against the taxpayer for contravention of any provision of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). Further held that it is not the liability of the taxpayer to find out that whether or not other person in the supply chain has paid the tax and is the fundamental legal principle, that the law does not compel a man to do that which he cannot possibly perform.

To

The State Tax Officer,

Bureau of Investigation,

North Bengal, Raiganj Zone

Raiganj, Uttar Dinajpur

West Bengal

E-mail: wbcomtax@gmail.

Subject: FORM GST MOV-02 dated 20.06.2022

Sir,

In reference to the aforesaid, we beg to state and submit that we are trader of Ferro-Alloys, Scrap etc. classifiable under HSN 7202, 7204 etc. of the GST Tariff and we are registered with the GST Department having GSTIN/UIN: 19AAFFM3496B1Z8, State: West Bengal, Code: 19. A copy of the GSTIN is annexed hereto and marked “A”.

It is stated that on June 14, 2022 we placed a purchase order on XYZ Private Limited (“Seller”) for purchasing 25 MT of Ferro Silicon Lumps (“said goods”). In terms of the said purchase order, it was agreed between the parties that the said goods shall be transported by us from the plant of the seller at Ri Bhoi, Meghalaya-793101 to our unit at 7/9, G.T. Road Howrah- 711210. For the said purpose we engaged M/s ABC Transport Corporation having its office at M Road, College Square, Cuttack- 753004 (“Transporter”) and the said transporter lifted the said goods from the Plant of the seller on 18.06.2022 accompanied with the following documents:

Invoice Bill (2 copy duplicate for transporter, 1 extra copy)

Delivery Challan

E-way Bill

Transporter bilty (2 copy)

A copy of the said documents are annexed herewith and collectively marked as “B”.

It is stated that we have paid GST Rs. 4,72,500/- (@ 18% of the taxable value of Rs. 26,25,000.00) on the said goods as evident from the invoice. The said seller also issued E-WAY BILL dated 18.06.2022 which is valid till 24.06.2022. 

As the said goods did not reach our premises within 21.06.22, we pursued the matter with the transporter on 22.06.22 when it came to our knowledge that on June 20, 2022 the State Tax Officer, Raiganj Zone, has purportedly detained the said goods and issued FORM GST MOV-02 dated 20.06.2022 to the driver, being an agent of the transporter. It is pertinent to mention herein that only when we contacted the transporter as stated hereinabove, the transporter forwarded us the documents. It is stated that no document was served on us in respect of the detention of our goods by the concerned department.  A copy of the FORM GST MOV-02 is annexed herewith collectively and marked “C”.

It is shocking to note that in spite of any irregularity and breach on our part, our said goods have been detained for almost a week without any authority of law and in contravention of the applicable rules and regulations framed in this regard. The form GST MOV-01 has not been issued and neither has you taken any further steps in terms of GST MOV-02 and this illegal detaining of the vehicle WB01GC5298 carrying our said goods is wrongful, arbitrary and whimsical.

 

In the above factual background and legal position, it is clearly evident that the seized goods were accompanied with the proper tax invoice, E-WAY Bill and other documents as stated herein above. It is clearly established from the records that the seized goods are already tax paid/charged. Hence, the illegal detaining of the said goods as mentioned in the notice FORM GST MOV-02 dated June 20, 2022 cannot and should not be insisted upon.

 

Section 129 of the CGST Act, 2017 deals with Detention, Seizure and Release of Goods and Conveyances in Transit. Clause (a) of Section 129 (1) of the Act, 2017 provides that the seized goods shall be released on payment of the applicable tax and penalty to one hundred percent of the tax payable on such goods. Clause (b) of Section 129 (1) of the Act, 2017 provides release of the seized goods on payment of the applicable tax and penalty equal to the fifty percent of the value of the goods reduced by the Tax Amount paid thereon and, in case of exempted goods, on payment of an amount equal to five percent of the value of the goods. Clause (c) of Section 129 (1) of the Act, 2017 provides release of the goods upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) of the said section.

 

The expression “on payment of the applicable tax and penalty equal to one hundred percent of the tax payable” in section 129 (1) (a) of the Act, 2017 make it clear that the seized goods shall be released upon payment of the tax applicable. The words “tax payable on such goods” in Section 129 (1) (a) would envisaged that the payment of tax and penalty equals to one hundred percent of the tax payable, where no tax was paid. In the present case, it is evident from tax invoice, E-WAY Bill and record that we have paid the tax on the seized goods and therefore there is no tax payable on the seized goods. 

It is stated that the seized goods are tax paid. There is no irregularity in any manner whatsoever and whatever on our part and therefore detainment as stated hereinabove is unwarranted. In such situation the seized goods may kindly be released immediately in the interest of justice.

In the circumstances, we pray that an order may be passed for release of the seized goods immediately failing which we shall be constrained to approach the appropriate forum for release of our said goods.

Regards

Yours Faithfully

For IRON & STEEL LTD.

Partner

Enclo: As stated above

Copy to: Commissioner of GST, Directorate of Commercial Taxes, Govt. of West Bengal