HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO AND HONOURABLE SRI JUSTICE T. AMARNATH GOUD WRIT PETITION No.2161 of 2020 ORDER: (per Hon ble Sri Justice M.S. Ramachandra Rao) petitioner herein is proprietary concern engaged in business of Iron and Steel and is registered dealer on rolls of Hyderabad Rural STU-I, Centre Jurisdiction, Gajularamaram, Hyderabad (2nd respondent). 2. petitioner was allotted GST No.36AAMPA4421B2ZC. 3. petitioner purchased goods from dealer M/s. JSW Steel Limited, Vidyanagar, Karnataka vide Tax Invoice No.19UJ2900401551 dt.11.12.2019 valued at Rs.3,52,920.74. 4. Against said tax invoice under Integrated Goods and Service Tax Act (I.G.S.T.), tax at Rs.18% was levied coming to Rs.63,526/-. plea of petitioner 5. According to petitioner, when consignment was coming from Vidyanagar, Karnataka with all requisite documents through vehicle bearing No.KA 35 C 0141, it was detained at Jeedimetla at 05:30 p.m. on 12.12.2019, and notice under Section 129 (3) of C.G.S.T. Act, 2017 (for short, Act ) was issued alleging wrong destination and directing payment of 9% of Central Tax and 9% MSR,J & TA,J ::2:: wp_2161_2020 of State Tax and penalty equal to tax estimating purchase value of Rs.11,14,579/- as against actual tax invoice value of Rs.4,16,447/-. 6. It is contended by petitioner that since at that time proprietor of petitioner could not contest it on account of there being marriage in his house on 12.12.2019 at Hyderabad, and since driver of vehicle was pressurizing for release of vehicle, he was forced to pay amount mentioned in notice dt.12.12.2019 issued by 1st respondent. 7. petitioner further contended that said collection of tax and penalty by respondents is through coercion and threat in spite of fact that consignment was covered by all requisite documents. It is alleged that when goods were in transit in inter-State sale, respondents cannot detain same and demand and collect tax in manner they have done which is arbitrary and without jurisdiction. 8. It is also contended that 1st respondent had no authorization as contemplated under Section 67 of Act read with Section 68 thereof and collection of taxes under both Central and State Acts towards G.S.T. is arbitrary and highhanded; that at best 1st respondent can collect from dealer security equivalent to amount payable under Clauses (a) or (b) in manner prescribed in Section 129(1) of Act; and that reason wrong destination given by respondents is not good and sufficient reason for MSR,J & TA,J ::3:: wp_2161_2020 levying and collecting tax and penalty from petitioner and detention of goods and vehicle as well as collection of tax and penalty, is contrary to provisions of G.S.T. Act, 2017. 9. It is also contended that penalty cannot be levied unless there is willfulness and contumacious conduct of dealer, and therefore, petitioner should be granted refund of amount of Rs.4,16,447/- levied and collected under both Central Tax Act and State Tax Act, 2017. stand of 1st respondent 10. Counter-affidavit was filed by 1st respondent contending that there was no pressure on dealer to pay tax and penalty; moreover show-cause notice in Form MOV-07 was given and opportunity to file objections was also given; and there was, therefore, compliance with principles of natural justice. 11. Quoting terms of invoice, it was contended how total value of goods in vehicle transporting them from Karnataka to Hyderabad was arrived at; that even if goods are coming from Karnataka there is possibility that goods were to be sold to third-party as local sale or not intended to be delivered at correct place indicated in documents being carried in conveyance / vehicle. 12. It is further contended that if goods were to be delivered at Balanagar according to invoice, vehicle cannot be at MSR,J & TA,J ::4:: wp_2161_2020 Jeedimetla since Balanagar comes first and Jeedimetla later, and no reasonable person would cross over Balanagar and then turn over to go back to place of destination. It is also stated that there is road from Jeedimetla to Balanagar which can be used to turn back to Balanagar. But, if said road is blocked due to strikes or repairs or if there are rallies only that can be done, and there is no reason assigned to take longer route avoiding normal route. 13. It was further contended that no objection was raised regarding notice to pay tax and penalty, and amount was also paid without any protest. 14. It is alleged that under guise of inter-State sale or supply, petitioner tried to sell goods in local market evading levies both under CGST and SGST. It is stated that 1st respondent had authorisedly issued impugned notice on 11.12.2019 to detain goods. 15. It was also stated that 1st respondent had valid authorization to detain vehicle with goods. Consideration by Court 16. We have noted contentions of both sides. 17. Admittedly, it was mentioned in order of detention of vehicle and consignment carried thereon from Karnataka to Hyderabad issued under Section 129(1) of CGST Act, 2017 that MSR,J & TA,J ::5:: wp_2161_2020 reason for such detention is wrong destination . Under Act, this is not ground to detain vehicle carrying goods or levy tax or penalty. 18. Though it is stated that tax and penalty were levied and collected because it was presumed that at Jeedimetla, there was possibility of local sale, mere possibility cannot clothe 1st respondent to take impugned action. There is no material placed on record by 1st respondent to show that any attempt was made by petitioner to deliver goods at different place and sell in local market evading CGST and SGST, because it was found at Jeedimetla. It is not as if detention was affected by 1st respondent after noticing any such attempt to sell goods in local market by petitioner. 19. When vehicle is being driven from Karnataka by local driver of Karnataka it is perfectly possible for driver to lose his way on account of being unfamiliar with roads in city of Hyderabad and bypassing Balanagar and going to Jeedimetla. Or else he may have entered City by Ring Road from direction of Jeedimetla to go towards Balangar, his destination. 20. So fact that vehicle was found at Jeedimetla does not automatically lead to any presumption that there was intention on part of petitioner to sell goods at local market evading CGST and SGST. MSR,J & TA,J ::6:: wp_2161_2020 21. invoice in custody of driver of vehicle indicated that IGST @ 18% was already collected and goods were coming from Karnataka to Balanagar in Hyderabad. When IGST was already paid, goods cannot be treated as having escaped tax and fresh tax and penalty cannot be imposed on petitioner. 22. We therefore hold that there was no warrant to detain vehicle along with goods, demand payment of Rs.4,16,447/- as tax and penalty under CGST and SGST Act, 2017. 23. Since petitioner could not contest it owing to wedding ceremony in his family at that point of time in order to be able to secure release of vehicle carrying goods at instance of driver of vehicle, such payment has to be presumed as one made due to economic duress and petitioner cannot be blamed for paying same without protest, when he had no choice but to pay it. 24. In our considered opinion, there were no good and sufficient reasons for detention by 1st respondent of vehicle and goods which it was carrying when transaction causing movement of goods was inter-State in nature and provisions of SGST were not shown to have been violated. Also, there is no warrant to levy any penalty since it cannot be said that there is any willfulness in conduct of dealer. 25. It is settled law that no tax shall be levied or collected except by authority of Law as per Article 226 of Constitution of India. MSR,J & TA,J ::7:: wp_2161_2020 26. In Dabur India Ltd. vs. State of Uttar Pradesh1, Supreme Court observed that litigant cannot be coerced by Government to make payment of duties which litigant is contending not to be leviable. Supreme Court held that though State is entitled to enforce payment and to take all legal steps, it cannot be permitted to play dirty games with citizens to coerce them in making payments when citizens were not obliged to make them. It also observed that if any money is due to Government it should not take extra- legal steps to recover it. 27. Therefore, in our considered opinion, impugned action of respondents in collecting amount of Rs.4,16,447/- from petitioner towards tax and penalty under CGST and SGST Act, 2017 under threat of detention of vehicle carrying said goods for absurd reason ( wrong destination ) when vehicle in question carried all proper documents evidencing that it was inter-State sale transaction is clearly arbitrary, violative of Articles 14, 265 and 300-A of Constitution of India. 28. 1st respondent is directed to refund same with interest at rate of 6% per annum from 13.12.2019 till date of payment within period of three (03) weeks from date of receipt of copy of order. 29. 3rd respondent shall also consider initiating disciplinary action against 1st respondent for above conduct of 1st respondent. 1 (1990) 4 S.C.C. Pg.113 MSR,J & TA,J ::8:: wp_2161_2020 30. Accordingly, Writ Petition is allowed as above with costs of Rs.25,000/- to be paid by 1st respondent. 31. As sequel, miscellaneous applications pending if any in this Writ Petition, shall stand closed. _____________________________ M.S.RAMACHANDRA RAO, J _______________________ T. AMARNATH GOUD, J Date: 04.03.2020 Ndr Commercial Steel Company v. Assistant Commissioner of State Tax