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IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
SURYA PRAKASH KESARWANI, JAYANT BANERJI, JJ.
M/s Gobind Tobacco Manufacturing Co. and Another - Petitioners
Versus
State of U.P. and Others - Respondents
Writ Tax No. 600 of 2022
Decided On : 17-05-2022
Constitution of India, 1950 – Article 14 – Central Goods & Service Tax Act, 2017 –Telangana Goods and Services Tax Act, 2017 – Section 129 – Equality before Law – Certiorari quashing – Intention of evasion - Writ petition has been filed praying reliefs - There is no intention of evasion of tax and the goods in question are covered by documents required to be carried as per the provisions of Rule 138(A). (Para 9).
Finding of the court: Facts as may be ascertained from averments made by parties in writ petition and counter affidavit, it is admitted to parties that goods in question originated from Panipat and were being transported with valid invoice but due to restriction imposed on account of COVID-19 pandemic, as specifically mentioned in paragraphs of writ petition, goods were unloaded and after arrangement of another vehicle was made under prevailing situation of COVID-19 pandemic, goods were transported to Nepal – Time gap was much, therefore, a second e-way bill was generated so that goods may reach to its destination at Nepal – There is absolutely no dispute that goods in question were dispatched by petitioner valid invoice and valid papers – Goods in question were intercepted and seized by respondents on hyper-technical ground and assumptions, without there being any allegation of intention to evade payment of tax – Second e-way bill was generated bonafidely and in circumstance beyond control of petitioners – Averments of petitioners in paragraph writ petition that generating second e-way bill was totally bonafide, has also not been denied by respondents – Since goods were covered by valid documents, therefore, it could not have been detained or seized and hence entire proceedings were totally arbitrary, illegal and without jurisdiction – Action of respondents in seizing goods in question is evidently an act of harassment to petitioners, breach of their fundamental rights guaranteed and blatant abuse of power by respondents.
Results: Writ petition allowed.
JUDGMENT :
1. Heard Shri Aloke Kumar, learned counsel for the petitioners and Shri Nimai Das, learned Additional Chief Standing Counsel for the State-respondents.
2. This writ petition has been filed praying for the following reliefs:-
(ii) Issue a suitable writ, order or direction in the nature of certiorari quashing the Order of release dated 13.03.2022 [Annexure no. 16 to the writ petition] passed by respondent no. 3 under Section 20 of the IGST Act read with section 129 (3) of the CGST Act.
(iii) Issue a suitable writ, order or direction in the nature of certiorari quashing the Notices dated 22.03.2022 and 28.03.2022 [Annexure no. 18 and 20 to the writ petition] issued by respondent no. 3.
(iv) Issue a suitable writ, order or direction in the nature of mandamus commanding the respondent no.3 to release the goods and vehicle no. UP65BT/2241 so seized/ detained vide Order dated 07.03.2022.
(v) Issue any other suitable writ, order or direction in favor of the petitioner as this Hon'ble High Court may deem fit and proper under the facts and circumstances of the case.
(vi) Award the cost of the petition to the petitioner."
3. This writ petition was heard at length on 21.04.2022 and a detailed order was passed. The matter was again heard on 29.04.2022 and 06.05.2022. Counter and rejoinder affidavits have been exchanged between the parties.
4. Petitioner no.1 is the partnership concern engaged in manufacture and sale of tobacco products and is registered under the provisions of The Central Goods & Service Tax Act, 2017 (hereinafter referred to as the 'CGST Act') having GSTIN 06AABFG2788A1ZQ at Panipat (Haryana). Petitioner no.2 is a proprietorship concern engaged in transportation of goods and is registered under the CGST Act as a service provider having GSTIN 09ACIPY7858G2ZO at Gorakhpur. The aforesaid facts stated in paragraphs 4 and 5 of the writ petition have not been denied by the respondent no.3 in the counter affidavit dated 05.05.2022.
5. In paragraph 6 of the writ petition, it has been stated that the goods manufactured by petitioner no.1 are usually consumed in Nepal which he used to export to Nepal covered under the letter of undertaking for export of excisable goods without payment of duty under Notification No.42/2001- CE(N.T.) dated 26.06.2001. In paragraph 7 of the writ petition, it has been stated that in the course of business, petitioner no.1 dispatched the consignment of BIJLI SPIT TOBACCO packed in 200 boxes valuing Rs.7,20,000/- covered under the invoice no.51/2021-22/GTMC dated 14.01.2022 to Lumbini Traders, Krishna Nagar, Nepal, through the transporter namely, Ankul Transport Service. In paragraphs 8 and 9, it has been stated that HSN code of the commodity meant for export was mentioned on the aforesaid invoice, and that the digits of tariff mentioned therein are required to be mentioned only when the commodity is subject matter of export. In paragraph 10 of the writ petition, it has been stated that in the invoice it was specifically mentioned that "Export to Nepal Goods dispatched under LUT ARN No.AD0603210027240 DTD. 06/03/2021" and the copy of LUT was attached with the invoice for the purpose of transhipment to Nepal. In paragraph 11 of the writ petition, it has been stated that the invoice issued for the goods was in accordance with the condition prescribed in Tariff Code-24039910. In paragraph 12, it has been stated that the petitioner no.1 got generated E-way Bill No.3414 0160 4901 from the portal of Government of India on 14.01.2022 at 3:09 P.M. for the goods in question by giving the reference of invoice.
6. The aforestated paragraphs 6, 7, 8, 9, 10, 11 and 12 of the writ petition have been replied by the respondent no.3 in paragraph 31 of the
Point of Law : There is no intention of evasion of tax and the goods in question are covered by documents required to be carried as per the provisions of Rule 138(A).
The expiration of an e-way bill during transit, without any intent to evade tax, does not justify severe penalties under the CGST Act; penalties must be proportionate to the offense committed.
The imposition of penalties for minor discrepancies in tax-related documents without intent to evade tax is not justified under the CGST/SGST Acts.
For imposition of penalties under the GST Act, intent to evade tax must be established; mere expiration of documents does not suffice.
Minor documentation discrepancies do not imply intent to evade tax, and valid transport documents render penalty imposition inappropriate.
The burden of proof lies with the petitioner to establish the genuineness of documents and actual movement of goods; failure to do so justifies seizure under the IGST/CGST Act.
Minor discrepancies in transport documentation do not warrant penalties under Section 129 of the Central Goods and Services Tax Act, with general penalties appropriately applied instead under Section....
Minor deviations in transport routes without intent to evade tax do not warrant harsh penalties; authorities should impose general penalties for trivial lapses in compliance with the Goods and Servic....
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