FASHION MARBLE AND GRANITE COMPANY PVT. LTD Versus ASSISTANT STATE TAX OFFICER STATE GOODS AND SERVICE TAX DEPARTMENT, SQUARD NO. VII, ERNAKULAM AND THE ASSESSMENT OFFICER, RANGE II, CENTRAL GOODS AND SERVICE TAX DEPT., ERNAKULAM
GST
2018 (7) TMI 758 – KERALA HIGH COURT – 2018 (17) G. S. T. L. 18 (Ker.)
KERALA HIGH COURT – HC
Dated:- 6-7-2018
W. P. (C). No. 21988 of 2018 (W)
GST
MR. DAMA SESHADRI NAIDU, J.
For The Petitioner : Sri.Deepu Thankan, Smt.Nimmy Johnson, Smt.Ummul Fida And Sri.A.Abdul Nabeel
For The Respondent : Sri. Shamsudheen V.K.
JUDGMENT
The petitioner, dealing in Marble and Granite, was a dealer under the Kerala Value Added Tax Act. Later it migrated to General Sales Tax Act (GST Act). When he supplied a consignment of goods to another dealer, the 1st respondent intercepted the goods and issued Ext.P3 detention proceedings. Later, he issued Ext.P4 show cause notice under Section 129(3) of the GST Act. Eventually, through Ext.P4 the 1st r
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ion to the Circular No.41/15/2018-GST dated 13th April 2018, issued by the Government of India.
4. Under these circumstances, the learned counsel contends that the 1st respondent's stand cannot be sustained and there shall be a judicial direction for the release of the detained goods.
5. The learned Government Pleader, on the other hand, has submitted that Section 17(5) of the Act is categoric that any payment paid under Section 129 will not entail input tax credit. According to him, it ought to have been under Section 130. Therefore, in the end, he has contended that as the 1st respondent has insisted to get the goods released, the petitioner ought to pay either in cash or through a demand draft.
6. Heard the learned counsel appearing for the petitioner as also the learned Government Pleader appearing for the respondents.
7. The facts are not in dispute. The goods detained, the petitioner was served with Ext.P4 show cause notice under Section 129 (3) of the Act. Therefore, the
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ch time as may be prescribed.
8. As the above extract demonstrates, the amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees and so on. If we further examine the circular, which concerns the interception of conveyances, inspection of goods in movement, their detention, release, and confiscation. Of that circular, Clause 2(h) reads:
“Where the owner of the goods or any person authorized by him comes forward to make the payment of tax and penalty as applicable under clause (a) of sub-section (1) of section 129 of the CGST Act, or where the owner of the goods does not come forward to make the payment of tax and penalty as applicable under clause (b) of sub-section (1) of the said section, the proper officer shall, after the amount of tax and penalty has been paid in accordance with the provisions of the CGST Act and the CGST Rules, release the goods and conveyance by an order in FORM GST MOV-05. Further, the order in FOR
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he provisions of sections 74, 129 and 130.
11. This provision clarifies that if a dealer pays tax under Section 74, 129 or 130, that dealer may not be entitled to input tax credit. It does not go beyond.
12. At this juncture, the petitioner's counsel submitted that once the petitioner has paid the amount through the electronic portal, it entirely lies in its discretion how it should use it. If at all, in terms of Section 17(5), it is not entitled to input credit, it can as well use the amounts lying to its credit for other purposes. To the extent it has paid the amount, the dealer stands discharged from the obligation under Section 129. Therefore, it is imperative that the respondent authorities shall release the goods, the counsel contended.
13. Indeed, as has rightly been contended by the petitioner's counsel, there is a difference between Section 129 and 130: Section 129 deals with detention and 130 with confiscation. Here, confiscation is not the case.
14. Under these c
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