Coming down heavily on officials in the Telangana goods and services tax (GST) department, the Supreme Court (SC) imposed an additional cost of Rs59,000 for harassing an assessee who faced a delay in transportation of goods due to agitations and road blockade. The apex court also allowed the Telangana government to recover the costs, after making payment to the writ petitioner, “directly from the persons responsible for this entirely unnecessary litigation.”
In an order, the bench of justice Dinesh Maheshwari and justice Hrishikesh Roy says, “...having found no question of law being involved; and having found this petition itself being rather misconceived, we are constrained to enhance the amount of costs imposed in this matter by the Telangana High Court.”
“...the amount of costs as awarded by the High Court in this matter is rather on the lower side. Considering the overall conduct of the petitioner no2 and the corresponding harassment faced by the writ petitioner (Satyam Shivam Papers Pvt Ltd), we find it rather necessary to enhance the amount of costs,” the bench says.
The apex court observed that the High Court has meticulously examined and correctly found that no fault or intent to evade tax could have been inferred against the writ petitioner.
P Venkat Reddy, counsel for the Telangana GST department, tried to raise the question of law while pleading to keep open, operation and effect of Section 129 of Telangana GST Act, 2017 and violation by the writ petitioner.
However, the SC pointed out that there was no intent on the part of Satyam Shivam Papers to evade tax. Instead, it says the goods in question could not be taken to the destination within the time for reasons beyond the company’s control.
“When the undeniable facts, including the traffic blockage due to agitation, are taken into consideration, the State alone remains responsible for not providing smooth passage of traffic,” the bench says.
The tax department has challenged an order passed by the HC in June last year. The High Court has awarded Rs10,000 as costs to Satyam Shivam Papers about tax and penalty of Rs69,000 that was sought to be imposed by the tax department.
The Telangana HC had stated, “The second respondent (the assessment official) merely states in the counter affidavit that there is clear evasion of tax and so he did not consider the said explanations. This is plainly arbitrary and illegal and violates Article 14 of the Constitution of India because there is no denial by the second respondent of the traffic blockage at Basher Bagh due to the anti-Citizenship Amendment Act (CAA) and National Register of Citizens (NRC) agitation on 4 January 2020 up to 8.30pm preventing the movement of auto trolley for otherwise the goods would have been delivered on that day itself. He also does not dispute that 4th January was a Saturday, 5th January was a Sunday, and the next working day was only 6 January 2020.”
Last August, the Tripura High Court had directed the tax authorities to release a transport vehicle and machinery detained due to the e-way bill’s expiry and other issues. The truck was detained by the state authorities for 24 hours, citing no registration for the excavator, during which the e-way bill expired, creating further problems.
The bench of chief justice Kureshi and justice Lodh said, “The tax department is not in a position to dispute that the vehicle did arrive at Churaibari check post carrying proper e-way bill and within the validity period of the e-way bill. The validity expired on account of an unforeseen and unexpected delay in crossing the check post since the transport department stopped the vehicle’s movement on the ground that the machinery was not registered in the state of Tripura. This issue was cleared when the transport department imposed a fine of Rs10,000, which NE Equipment Solutions paid.”
This process, however, took more than 24 hours, and in the meantime, the validity of the e-way bill expired. Though NE Equipment Solutions generated a new e-way bill, the GST department of the state was not prepared to accept it, the bench noted.