GST INDIA Biz — Whether goods can be detained under GST law on the ground of undervaluation compared to MRP and alleged wrong HSN classification.

Alfa Group vs The Assistant State Tax Officer & Others

Date of Order: November 18, 2019

Case Law No: GIB-KERHC-2019-01

Subject: Whether goods can be detained under GST law on the ground of undervaluation compared to MRP and alleged wrong HSN classification.

Description:

Facts :
The petitioner’s goods were detained during transit through a detention order (Form GST MOV-06) on the ground that the invoice value was lower than the MRP and HSN code was wrongly mentioned.
The petitioner challenged the detention contending that these grounds do not justify detention under Sections 129 or 130 of the GST Act.
It was also contended that there was no discrepancy in tax rate or supporting documents accompanying the goods.
The issue arose from detention at a parcel godown during movement of goods.

Court Decision:
The Court held that undervaluation with reference to MRP is not a valid ground for detention of goods under the GST Act.
There is no statutory provision prohibiting sale of goods below MRP, and such comparison cannot justify detention.
The Court further held that incorrect HSN classification, without impact on tax rate, does not warrant detention.
The detention order was quashed and authorities were directed to release the goods forthwith.
Directions were also issued to the Commissioner to ensure such unwarranted detentions are not repeated.

Other Case Law

Sri Padmavathi Marketing v. Assistant Commissioner of Commercial Taxes

Scope of Rule 86A – Whether ITC can be blocked for supplier when alleged wrongful availment is by recipient.

Case Facts:The petitioner challenged a show-cause notice proposing blocking of I...

Commissioner of Income Tax, Vidarbha vs. Godavaridevi Saraf

Whether an Income Tax Tribunal sitting outside the State of Madras is bound to follow a Madras High Court decision declaring Section 140A(3) of the Income Tax Act, 1961 as unconstitutional, and whether the penalty imposed under that section can be sustain

BACKGROUNDThe assessee filed a return of income for the assessment year 1968-69 ...

Shamhu Saran Agarwal and Company v. Additional Commissioner Grade-2 & Ors.

Legality of detention and penalty under Section 129 GST on ground of undervaluation of goods

Facts :The petitioner challenged a penalty order dated 20.12.2020 and appellate ...