Uttaranchal High Court: A Division Bench of Ramesh Ranganathan, CJ and Alok Kumar Verma, J. entertained a special appeal filed against the order of Single Judge in a writ petition where the petition was dismissed on the ground of alternative remedy.

Factual matrix of the case was that the appellant purchased timber from Uttarakhand Forest Development Corporation, under Section 3 of the U.P. Forest Development Corporation Act, 1974. It was contended by the appellant that the Corporation issued an invoice where both CGST and SGST were charged on the sale price of goods. It was further contended that the appellant paid the amount to the Corporation even before the goods were transported.

It was the appellant’s case that the Corporation should have raised two separate e-way bills for two separate consignments but had raised one e-way bill for the total amount on both the consignments. Further, the goods of the appellant were in transit, they were seized and, on the ground that only one e-way bill was issued instead of two, a penalty of Rs 1,70,688 was sought to be levied on the appellant-writ petitioner. Hence, it was contended that the penalty, if at all, should have been paid by the Corporation since the error in issuing one e-way bill instead of two was on their part and not on the part of the appellant. The Single Judge, however, dismissed the writ petition at the stage of admission relegating the appellant-writ petitioner to the remedy under Section 107 of the Central Goods and Services Tax Act, 2017. Hence the appellant found the special appeal appropriate for proper adjudication of the case.

The counsel for the appellant Piyush Garg, submitted that the proceedings under challenge was an order of detention of goods under Section 129 of the CGST Act; it was against the demand raised on detention of the goods, for payment of tax and penalty, that the writ jurisdiction of Court was invoked; tax had already been paid to the Corporation before the goods were even transported by the appellant; the remedy, under Section 107 of the CGST Act, was not efficacious since sub-section (6) of Section 107, which required 10% of the disputed amount to be paid, only provided for stay of payment of the remaining amount, and nothing more; the appellant was not able to take delivery of the seized goods from the second respondent since Section 107 of the CGST Act does not provide for such an eventuality; and the appellant had perforce to avail the remedy of invoking the jurisdiction of this Court under Article 226 of the Constitution of India.

The Law point discussed by the Court was that, Section 107 of the CGST Act related to Appeals to the Appellate Authority and, under sub-section (1) thereof, any person, aggrieved by any decision or order passed, under the CGST Act or the State Goods and Services Tax Act, by an adjudicating authority may appeal to such Appellate Authority. While an appeal, under Section 107 of the CGST Act, would lie to the Appellate Authority against any decision or order passed by an adjudicating authority, Section 2(4) of the CGST Act defines “adjudicating authority” in very broad terms. Under Section 2(4) of the CGST Act, an “adjudicating authority” has been defined to mean any authority, appointed or authorised to pass any order or decision under the Act, but not to include the authorities specified therein. Admittedly the Appellate Authority, under Section 107(1) of the CGST Act, was not one such. Since an appeal would lie against any order passed or decision taken by any authority appointed or authorized to pass any order or decision under the Act, it does appear that an order of detention can also be appealed against under Section 7(1) of the CGST Act.

Hence, the Court observed that there was no dispute regarding tax and it was the appellant’s case that the tax in its entirety had been paid to the Corporation which, in turn, was obligated to remit the said amount to the State Tax Department. Since the appellant-writ petitioner disputed levy of penalty in its entirety, they would, in terms of Section 107(6) of the CGST Act, were only required to deposit 10% of such penalty. That did not, however, solved the problem which the appellant faced i.e. for release of the goods detained by the respondent-authorities. If, on the other hand, he were to comply with the demand notice issued under Section 129(1) of the CGST Act then, in terms of Section 129(5) of the CGST Act, on payment of the amount referred to in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded, in which event the goods were to be released. Hence, the Court ordered the amount to be refunded to the appellant.[Agarwal Timber Suppliers v. State of Uttarakhand, 2019 SCC OnLine Utt 730, decided on 06-08-2109]

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