IN THE HIGH COURT OF KERALA AT ERNAKULAM
GOPINATH P., J.
SARATH B.S.
Versus
STATE OF KERALA
W.P.(C) No. 25856 of 2024, decided on 29-10-2024
GST : Where after cancellation of registration petitioner sold expired/nearly expired stocks without any documents, proceedings under section 130 were correctly initiated as mere fact of cancellation of registration does not absolve him of liability to comply with provisions of GST laws.
Confiscation of goods and conveyance and levy of penalty – Effect of cancellation of registration – Registration of
petitioner was cancelled – As petitioner was dealing in paints and hardwares and he had some unsold stock, most of which had either completed expiry date or was nearing expiry date – Registered person approached petitioner to take over goods – Goods were then transported by purchaser in vehicle – Vehicle was intercepted and detained on premise that goods were being transported without support of any documents as contemplated by law – HELD : Fact that registration of petitioner was cancelled did not absolve him of liability to comply with provisions of GST laws and even on petitioner’s own showing there was a sale of goods by petitioner to another or a consideration – Therefore, it could not be said that proceedings under section 130 were wrongly initiated and concluded against petitioner [Section 130, read with section 29 of Central Goods and Services Tax Act, 2017/Kerala State Goods and Services Tax Act, 2017] [paras 4]
In favour of revenue
REPRESENTED BY : Shri Sreeji M.M., Adv. for the Petitioner.
Shri Jasmine M.M., Adv. Govt. Pleader, for the Respondent.
[Judgment]. – Petitioner has approached this Court challenging Ext.P4 order issued under Section 130 of the CGST/SGST Act. According to the petitioner, the petitioner was a registered dealer in the CGST/SGST Acts and the registration of the petitioner had been canceled with effect from 11.10.2023. According to the petitioner, the petitioner was dealing in paints and hardwares and he had some unsold stock, most of which had either completed the expiry date or was nearing the expiry date. It is stated that one Mr. Lohi, a registered person under the CGST/SGST Acts had approached him to take over the goods by paying a total amount of Rs.1,90,000/-and a sum of Rs. 10,000/- was also paid as advance. According to the petitioner, the goods were then transported by the purchaser in vehicle bearing Registration No. KL-16 F 8975 and the vehicle was intercepted by the Assistant Enforcement
officer, Enforcement Squad No.2, Thiruvananthapuram and detained on the premise that the goods were being transported without the support of any documents as contemplated by the law. After issuing notice to the petitioner and to the owner of the conveyance, the proceedings culminated in Ext.P4 order imposing on the petitioner the liability to pay penalty of Rs. 29,084/- and a fine in lieu of confiscation of Rs. 1,61,580/- in respect of the conveyance.
2. The learned counsel appearing for the petitioner submits that the proceedings culminating in Ext.P4 order are totally without jurisdiction and cannot be sustained in law. He submitted that since the registration of the petitioner in CGST/SGST Acts had already been canceled, the proceedings could not have been continued and culminated against the petitioner in the peculiar facts and circumstances of this case. It is submitted that no proceedings were initiated against the aforesaid Mr. Lohi, who was the purchaser of the goods and who had arranged for the transport of goods from the premises of the petitioner. It is submitted that the petitioner is facing acute financial difficulties and the petitioner is not in a position to pay the amount as per Ext.P4. It is submitted that the transporter is also suffering immensely as the wife of the owner of the vehicle which was confiscated is suffering from cancer and
he also not in a position to pay the fine in lieu of confiscation. It is submitted that in the peculiar facts and circumstances of the case, it could not be said that there is violation of law in transportation of the goods.
3. The learned Government Pleader vehemently opposes the grant of any relief to the petitioner. It is submitted that in the statement given by the petitioner initially, the case of the petitioner was that the goods were being transported from his shop to his godown. It is submitted that he had not even disclosed that his registration had been canceled. It is submitted that the returns filed by the petitioner during the period when his registration was valid also show substantial discrepancies. It is submitted that the petitioner has no case that transport was with any supporting document and therefore it cannot be said that the proceedings under Section 130 were illegally concluded against the petitioner/the transporter.
4. Having heard the learned counsel for the petitioner and the learned senior Government Pleader, I am of the view that the petitioner has not made out any case for interference with Ext.P4. Admittedly certain goods were being transported without the cover of any documents. The case of the petitioner that he is a dealer whose registration had already been canceled and the goods that were being transported are items, the expiry date of which was already over and the goods have been taken over/purchased by a person named Lohi cannot be accepted for more reasons than one. Even assuming that the case of the petitioner now put forth before this Court is correct, the registered person (Mr.Lohi) ought to have transported the goods under cover of proper documents. The fact that the registration of the petitioner was canceled does not absolve him of the liability to comply with the provisions of the GST laws and even on the petitioner’s own showing there was a sale of goods by the petitioner to the aforesaid Mr. Lohi for a consideration of Rs.1,90,000/-.
Therefore it cannot be said that the proceedings under Section 130 were wrongly initiated and concluded against the petitioner. Therefore, this writ petition will stand dismissed reserving the liberty of the petitioner to file an appeal against Ext.P4 order, if so advised. Since, this writ petition was pending before this Court, from 17.07.2024 to today(29.10.2024) the period during which this writ petition was pending before this Court shall be excluded for the purpose of determining any period of limitation within which the petitioner had to file an appeal against Ext.P4 order.
