In, Hindustan Steel and Cement Vs. Assistant State Tax Officer, a Single Bench of Kerala HC has held that, The fact that the culmination of proceedings in respect of a person who seeks to make payment of Tax and Penalty under Section 129(1)(a) does not result in the generation of a summary of an order under Form DRC-07 cannot result in the right of the person to file an appeal under Section 107 being deprived.
Facts
That goods/conveyance of the petitioners were the subject matter of detention/seizure under Section 129 of the CGST/SGST Acts and the petitioners in these cases opted to pay amounts in terms of the pre- amended provisions of Section 129(1)(a) of the CGST/SGST Acts, to get the goods/conveyance released pending finalisation of proceedings. On payment of the amount, the goods and the conveyance were released. While an order was issued but, a corresponding summary of order/demand was not issued.
The point of Consideration arose before the Kerala HC , that for consideration in these cases is whether a person who opts to make payment in terms of Clause (a) of Sub-Section (1) of Section 129 of the CGST/SGST Acts to get goods/conveyance/documents detained or seized in proceedings under Section 129 released is deprived of his right to file an appeal against the proceedings.
Contention Made ;
Petitioner’s: the petitioners submits that on the reading of sub-section (3) of Section 129 CGST/SGST Acts with Rule 142 (5) of the CGST/SGST Rules, the order which is issued have been accompanied by a summary of the order in Form DRC-07. It is submitted that without a summary of the order in Form DRC-07, the petitioners are disabled from filing an appeal.
Respondent’s: on an assessee or a person who is the subject matter of proceedings under Section 129 CGST/SGST Acts, opting to make payment of tax and penalty in terms of Section 129(1)(a), the proceedings under Section 129 come to an end.
That the wordings of sub-rule (5) of Rule 142 clearly suggest that unless there is a demand for tax or interest or penalty, there cannot be a proceeding under DRC-07.
Court Observation
The Single Bench of Kerala HC while noting relevant statutory provisions observed that; that the culmination of proceedings in respect of a person who seeks to make payment of Tax and Penalty under Section 129(1)(a) does not result in the generation of a summary of an order under Form DRC-07 cannot result in the right of the person to file an appeal under Section 107 being deprived.
Further Court observed that, Section 129 contemplate the issuance of a notice and the passing of an order. A reading of sub-section (3) suggests that whether the person suffering the detention chooses to make payment under Section 129(1)(a) or chooses to provide security in terms of Section 129(1)(c), the officer detailing or seizing the goods or conveyance has to issue a notice specifying the tax and penalty payable.
Court Judgment
The Kerala HC While allowing the Writ Petition has held that; A reading of sub-section (3) of Section 129 of the CGST/SGST Acts, the provisions of Rule 142 referred to above and the provisions of the circular, cumulatively, compel me to hold that whether or not a person opts to make payment under section 129(1)(a) or to provide security under Section 129(1)(c), the responsibility of the officer to pass an order under sub-section (3) of Section 129 and to upload a summary of the order/demand in Form DRC-07 continues.
Further Court held that, Further, Section 107 of the CGST Act is widely worded and provides that any person aggrieved by any decision, or order passed under the CGST/SGST Acts or Union Territory Goods and Services Tax Act, by an adjudicating authority, may appeal to such appellate authority as may be prescribed, within three months from the date of order.
Case: Hindustan Steel and Cement Vs Assistant State Tax Officer
Citation: WP(C) NO. 17454 OF 2022
Bench: Hon’ble Mr Justice Gopinath P.
Decided on: 20th July, 2022.
Read Judgment ;
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