VARDAN ASSOCIATES PVT. LTD. versus ASSISTANT COMMISSIONER OF STATE TAX CENTRAL SECTION & ORS

Citation: [2023] 16 S.C.R. 1118 · Decided: 31-10-2023 · Supreme Court of India · Bench: HIMA KOHLI, AHSANUDDIN AMANULLAH · Disposal: Disposed off
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Judgment (excerpt)

[2023] 16 S.C.R. 1118 : 2023 INSC 1087
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CASE DETAILS
VARDAN ASSOCIATES PVT. LTD.
v.
ASSISTANT COMMISSIONER OF STATE TAX CENTRAL 
SECTION & ORS.
(Civil Appeal No. 8302 of 2023)
OCTOBER 31, 2023
[HIMA KOHLI AND AHSANUDDIN AMANULLAH, JJ.]
HEADNOTES
Issue for consideration: Consignment was intercepted in the course of 
inter-state movement, as there was no valid E-way bill. High Court directed 
that the goods be released subject to payment of the entire amount of the 
Goods and Service Tax in cash and 50% of the penalty imposed also in cash 
while the remaining 50% by way of bank guarantee.
Central Goods and Services Act, 2017 – West Bengal Goods and 
Services Act, 2017 – Integrated Goods and Services Tax Act, 2017 – 
Appellant executed work contracts for GAIL in the State of UP in 
Auraiya district, including work in the State of West Bengal – It availed 
services of one M/s. HFC for mobilising a machine-the consignment 
(capital goods under CGST Act) used for execution of works contracts 
from Auraiya, UP to Durgapur, West Bengal, for which an E-way Bill 
was generated – However, as transportation was not done within the 
validity period of the E-way bill, the consignment was intercepted and 
order of detention was issued, at the time of entering the State of West 
Bengal – Consignment and the vehicle detained – Order of demand of 
tax and penalty passed – Eventually, High Court inter alia, directed that 
the goods be released subject to payment of the entire amount of the 
Goods and Service Tax in cash and 50% of the penalty also in cash while 
the remaining 50% by way of bank guarantee – Challenged – Present 
consideration conﬁ ned only to the quantum of penalty:
Held: Appellant was saddled with tax – Law also provides for 
imposition of penalty – Ordinarily, this Court would have refrained from 
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interfering, but because there was an E-way bill that was generated and 
in view of the factual scenario which is not disputed that the appellant 
is the owner of the consignment and was using it in connection with its 
contractual obligations in Uttar Pradesh and then having a similar contract 
in West Bengal and no evidence had been placed on record showing that 
the consignment was to be sold/used for any other purpose in respect of any 
other party, the orders passed by the High Court varied – ₹ 54,00,000/- being 
the tax imposed is upheld however, penalty is reduced to 50% of the penalty 
imposed and would now be ₹ 27,00,000/- – ₹81,00,000/- be paid by the 
appellant (subject to payment already made) – Upon the same being done, 
the transportation vehicle as also the consignment be released – Present order 
passed u/Article 142 and shall not be a precedent. [Paras 18, 17, 19 and 20]
OTHER CASE DETAILS INCLUDING IMPUGNED 
ORDER AND APPEARANCES
CIVIL APPELLATE JURISDICTION : Special Leave Petition (C) 
No.21079 of 2022.
From the Judgment and Order dated 02.08.2022 of the High Court at 
Calcutta in WPA No.17452 of 2019.
Appearances:
R. Balasubramanian, Sr. Adv., Mehul Sharma, Karunakar Mahalik, 
Yash Tyagi, Manoranjan Mishra, Sarbendra Kumar. Advs. for the Appellant.
Balbir Singh, A.S.G., Rakesh Dwivedi, Sr. Adv., Ms. Madhumita 
Bhattacharjee, Ms. Urmila Kar Purkayasthe, Ms. Srija Choudhury, Mukesh 
Kumar Maroria, Rupender Sinhmar, Shlok Chandra, Shantnu Sharma, 
Naman Tandon, Advs. for the Respondents.
JUDGMENT / ORDER OF THE SUPREME COURT
ORDER
Leave granted. 
2. We have heard learned counsel for the parties.
3. The present appeal emanates from the ﬁ nal judgment and order 
passed by the learned Single Judge of the High Court at Calcutta (hereinafter 
VARDAN ASSOCIATES PVT. LTD. v. ASSISTANT 
COMMISSIONER OF STATE TAX CENTRAL SECTION 
1120 
SUPREME COURT REPORTS 
[2023] 16 S.C.R.
referred to as the “High Court”) in Writ Petition bearing W.P.A. No.17452 
of 2019 dated 2nd August, 2022 (hereinafter referred to as the “Impugned 
Judgment”), by which the said petition was dismissed.
BRIEF FACTS:
4. The appellant, being a company, carries on the business of horizontal 
directional drilling using trenchless methodology for underground utilities 
- oil/gas, telecom and power. The appellant functions as a contractor and is 
duly registered under the Central Goods and Services Act, 2017 (hereinafter 
referred to as the “CGST Act”) and the West Bengal Goods and Services 
Act, 2017 (hereinafter referred to as the “WBGST Act”). For many years, 
the appellant executed work contracts of the Gas Authority of India Limited 
(he
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