Allahabad High Court says petitioner cannot argue case beyond pleadings once finding of fact recorded against assessee

The Allahabad High Court while dismissing the petition said that “once the finding of fact, which has been recorded against the assessee has not been assailed in the petition, the petitioner cannot be permitted to argue the case beyond the pleadings”.

A Single Bench of Justice Piyush Agrawal passed this order while hearing a petition filed by M/S Millennium Impex Pvt Ltd.

By means of the petition, the petitioner is assailing the order dated 31.8.2020 passed by respondent no 1 in Appeal A.Y 2019-20 dismissing the appeal filed by the petitioner.

The facts of the case are that the petitioner is a registered company incorporated under the Companies Act, as well as duly certified by ISO 9001:2015.

The petitioner is a verified seller of supreme quality of metal seated zero leakage Ball Valves and purchaser of Ball Valve, Diaphragm Valves in bulk. In the normal course of business, the petitioner has made outward supply of Rotor Assembly Elmo and Complete Assy-CL 3001 to NTPC Ltd, Ramagundam Super Thermal Power Station, P.O Jyotinagar, Distt Pedapalli, Telangana vide Tax Invoice dated 14.8.2019 and the said goods were being transported from New Delhi to Telangana via Agra, U.P , where the same was intercepted by respondent no 2 at Saiyan, Agra, U.P on 16.8.2019 and after physical verification of the goods, it was found that part B of the e-way bill accompanying with the goods, was not filled on which notice was issued proposing to impose tax @ 18 % i.e Rs 14,63,063/- along with equal amount of penalty.

Thereafter on deposit of impugned tax along with penalty, the goods in question were released and respondent no 2 vide order dated 21.8.2019 passed the penalty order in Form GST MOV 09 under Section 20 of IGST read with Section 129 (3) of CGST Act observing that part B of e-way bill was not filled, hence the seizure of the goods was valid.

Feeling aggrieved to the said order, the petitioner has filed an appeal which was dismissed by respondent no 1 by order dated 31.8.2020.

Counsel for the petitioner submitted that goods in question were sold by one registered dealer to another registered dealer and the same was accompanied with genuine tax invoices, GR, e-way bill; the authorities ought not to have seized the goods on technical glitch.

He further submitted that merely because part B of e-way bill was not filled, which was required to be filled by the transporter, the proceedings had wrongly been initiated against the petitioner.

It was further argued that there was no intention to evade the payment of tax; once the authorities have not recorded any finding of fact in respect of any intention to evade the payment of tax, the impugned order is not justified in the eyes of law and same is liable to the quashed.

Per contra, Rishi Kumar, A.C.S.C has supported the impugned order and submitted that it is admitted fact that at the time of interception of goods, the documents which were produced by the petitioner, after verification of the same, it was found that part -B of e- way bill was not filled and the same is in contravention of the provisions of the Act, therefore, proceeding has rightly been initiated.

It was further argued that after detention of the goods a show cause notice was issued to which no reply was submitted by the petitioner to explain the fact that under what circumstances, part -B of the eway bill was not filled. The amount was deposited and goods were released on the next date, which shows that there was contravention of the provisions as contemplated under the Act.

The Court noted that,

Admittedly, the goods were intercepted during transportation from New Delhi to Telangana at Agra, U.P and after verification of the documents produced, it was found that part- B of the e- way bill was left blank thereafter a show cause notice was issued to the petitioner but the petitioner has not submitted any explanation for the same. But on deposit of tax along with penalty, the goods were released on 27.8.2019.

The petitioner has not submitted any explanation up to the stage of this Court that under what circumstances, part B of the e-way bill was not filled. The demand raised against the petitioner was challenged in the appeal but the same has been dismissed by the impugned order dated 31.8.2020. The petitioner has not assigned any reason, whatsoever, for not complying with the provisions under Rule 138.

An argument has been raised by the counsel for the petitioner that there was no intention to avoid the payment of tax or any finding has been recorded by the authorities below in this respect.

The Court observed that,

He has relied upon para 3 and 5 of the grounds of appeal filed before the first appellate authority.

On perusal of the impugned order, it shows that the petitioner pressed only two grounds taken in the appeal. Further not a single word has been whispered in the writ petition about the said argument, as such the petitioner’s counsel cannot be permitted to argue the case without any pleading in the writ petition.

On perusal of the judgements of the Apex Court as well as this Court, it has been held that the petitioner cannot be permitted to argue the case without there being any pleading in support of his arguments.

No rebuttal / rejoinder affidavit has been filed by the petitioner controverting the said assertions made in the counter affidavit and on the other hand on 16.10.2023, a statement was made on behalf of the petitioner that the petitioner did not propose to file any rejoinder affidavit.

“Once the finding of fact, which has been recorded against the assessee has not been assailed in the petition, the petitioner cannot be permitted to argue the case beyond the pleadings. In view of the aforesaid facts, the case law as well as circular relied upon by the petitioner are of no help to him.

In view of the facts as stated above, no interference is called for by the Court in the impugned order”, the Court further observed while dismissing the petition.