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ITEM NO.3 Court 14 (Video Conferencing) SECTION XII-A
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 21132/2021
(Arising out of impugned final judgment and order dated 02-06-2021
in WP No. 9688/2020 passed by the High Court For The State Of
Telangana At Hyderabad)
ASSISTANT COMMISSIONER (ST) & ORS. Petitioner(s)
VERSUS
M/S SATYAM SHIVAM PAPERS PVT. LIMITED & ANR. Respondent(s)
(FOR ADMISSION and I.R. and IA No.168896/2021-EXEMPTION FROM FILING
C/C OF THE IMPUGNED JUDGMENT )
Date : 12-01-2022 This petition was called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE DINESH MAHESHWARI
HON'BLE MR. JUSTICE HRISHIKESH ROY
For Petitioner(s) Mr. P. Venkat Reddy, Adv.
Mr. Prashant Tyagi, Adv.
Mr. P. Srinivas Reddy, Adv.
M/S. Venkat Palwai Law Associates, AOR
For Respondent(s)
UPON hearing the counsel the Court made the following
O R D E R
Having heard learned counsel for the petitioners and having
perused the material placed on record, we find no reason to
consider interference in the well-considered and well-reasoned
order dated 2nd June, 2021, as passed by the the High Court for the
State of Telangana at Hyderabad in Writ Petition No. 9688 of 2020.
Rather, we are clearly of the view that the error, if any, on the
part of the High Court, had been of imposing only nominal costs of
Rs. 10,000/- (Rupees Ten Thousand) on the respondent No. 2 of the
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writ petition, who is petitioner No.2 before us.
The consideration of the High court in the order impugned and
the material placed on record leaves nothing to doubt that the
attempted inference on the part of petitioner No.2, that the writ
petitioner was evading tax because the e-way bill had expired a day
earlier, had not only been baseless but even the intent behind the
proceedings against the writ petitioner was also questionable,
particularly when it was found that the goods in question, after
being detained were, strangely, kept in the house of a relative of
the petitioner No.2 for 16 days and not at any other designated
place for their safe custody.
The High Court has, inter alia, found that:
“41. ……It was the duty of 2nd respondent to consider the
explanation offered by petitioner as to why the goods
could not have been delivered during the validity of the
e-way bill, and instead he is harping on the fact that
the e-way bill is not extended even four(04) hours before
the expiry or four(04) hours after the expiry, which is
untenable.
The 2nd respondent 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 2nd respondent of the traffic blockage
at Basher Bagh due to the anti CAA and NRC agitation on
4.01.2020 up to 8.30 pm preventing the movement of auto
trolley for otherwise the goods would have been delivered
on that day itself. He also does not dispute that
04.01.2020 was a Saturday, 05.01.2020 was a Sunday, and
the next working day was only 06.01.2020.”
The High Court has further found and, in our view, rightly so
thus:
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“42. How the 2nd respondent could have drawn an inference
that petitioner is evading tax merely because the e-way
bill has expired, is also nowhere explained in the
counter- affidavit.
In our considered opinion, there was no material
before the 2nd respondent to come to the conclusion that
there was evasion of tax by the petitioner merely on
account of lapsing of time mentioned in the e-way bill
because even the 2nd respondent does not say that there
was any evidence of attempt to sell the goods to somebody
else on 06.01.2020. On account of non-extension of the
validity of the e-way bill by petitioner or the auto
trolley driver, no presumption can be drawn that there
was an intention to evade tax”.
The High Court has also commented on blatant abuse of the power
by the petitioner No.2 and has deprecated his conduct in the
following words:
“43. We are also unable to understand why the goods were
kept for safe keeping at Marredpally, Secunderabad in
the House of a relative of 2nd respondent for (16) days
and not in any other place designated for such safe
keeping by the State.
44. In our opinion, there has been a blatant abuse of
power by the 2nd respondent in collecting from the
petitioner tax and penalty both under the CGST and SGST
and compelling the petitioner to pay Rs.69,000/- by such
conduct.
45. We deprecate the conduct of 2nd respondent in not
even adverting to the response given by petitioner to the
Form GST MOV-07 in Form GST MOV-09 and his deliberate
intention to treat the validity of the expiry on the e-
way bill as amounting to evasion of tax without any
evidence of such evasion of tax by the petitioner.”
Having said so, the High Court has set aside the levy of tax
and penalty of Rs. 69,000/- (Rupees Sixty-nine Thousand) while
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imposing costs of Rs. 10,000/- (Rupees Ten Thousand), payable by
the petitioner No.2 to the writ petitioner within four weeks.
The analysis and reasoning of the High Court commends to us,
when it is noticed 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. However, as commented at
the outset, 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 No.2 and the corresponding harassment
faced by the writ petitioner we find it rather necessary to enhance
the amount of costs.
Upon our having made these observations, learned counsel for
the petitioners has attempted to submit that the questions of law
in this case, as regards the operation and effect of Section 129 of
Telangana Goods and Services Tax Act, 2017 and violation by the
writ petitioner, may be kept open. The submissions sought to be
made do not give rise to even a question of fact what to say of a
question of law. As noticed hereinabove, on the facts of this case,
it has precisely been found that there was no intent on the part of
the writ petitioner to evade tax and rather, the goods in question
could not be taken to the destination within time for the reasons
beyond the control of the writ petitioner. 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.
Having said so; having found no question of law being
involved; and having found this petition itself being rather mis-
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conceived , we are constrained to enhance the amount of costs
imposed in this matter by the High Court.
The High Court has awarded costs to the writ petitioner in the
sum of Rs. 10,000/- (Rupees Ten Thousand) in relation to tax and
penalty of Rs.69,000/- (Rupees Sixty-nine Thousand) that was sought
to be imposed by the petitioner No.2. In the given circumstances, a
further sum of Rs. 59,000/- (Rupees Fifty-nine Thousand) is imposed
on the petitioners toward costs, which shall be payable to the writ
petitioner within four weeks from today. This would be over and
above the sum of Rs. 10,000/- (Rupees Ten Thousand) already awarded
by the High Court.
Having regard to the circumstances, we also make it clear that
the State would be entitled to recover the amount of costs, after
making payment to the writ petitioner, directly from the person/s
responsible for this entirely unnecessary litigation.
This petition stands dismissed, subject to the requirements
foregoing.
Compliance to be reported by the petitioners.
(NISHA KHULBEY) (RAM SUBHAG SINGH)
SENIOR PERSONAL ASSISTANT BRANCH OFFICER
