Production of rectifying documents before detention of goods negates grounds for penalty under GST rules, reaffirming procedural fairness.

JUDGMENT

Piyush Agrawal, J.

Heard Mr. Pranjal Shukla for the petitioner and Mr. Rishi Kumar, learned A.C.S.C. for State-respondents.

2. The instant Writ Tax is being entertained by this Court in view of the fact that G.S.T. Tribunal is not functional in the State of Uttar Pradesh pursuant to the Gazette notification of the Central Government bearing number CG-DL-E-14092023-248743 dated 14.09.2023.

3. By means of this writ petition, the petitioner is assailing the order dated 27.1.2022 passed by Assistant Commissioner, Mobile Squad, State Goods and Services Tax, Khataunil Unit Muzaffarnagar, respondent no. 3 and the order dated 2.7.2022 passed by Additional Commissioner, Grade -2 (Appeal), State Goods and Services Tax Muzaffarnagar, respondent no. 2.

4. Brief facts of the case as stated, are that the petitioner is a proprietorship concerned having GSTIN No. 09AAPFG6376E1ZY and engaged in the business of manufacturing and sale of laminated papers. In the normal course of business, the goods were loaded on Truck no. RJ 01 GC 4269 for dispatch from Muzaffarnagar to Rajasthan along with tax invoices, E-way Bills and GR. During transit, the goods were intercepted on 25.1.2022 and Form GST MOV-2 was issued by respondent no. 3 after recording the statement of the truck driver and after physical verification Form GST MOV-04 was issued on the ground that the goods were found to be different than mentioned in accompanying documents. Thereafter a show cause notice was issued in Form GST MOV-07 on 27.1.2022. The petitioner submitted reply and being not satisfied with the same, penalty was imposed by order dated 27.1.2022. Thereafter the petitioner filed an appeal against the said order, which was also dismissed by impugned order dated 2.7.2022. Hence the present writ petition.

5. Learned counsel for the petitioner has submitted that it is admitted that the goods were moving along with tax invoice no. 139 dated 25.1.2022 along with e- way bill but before physical verification or issuance of show cause notice or passing the detention as well as seizure order, another tax invoice no. 140 dated 25.1.2022 along with e-way bill was produced rectifying the mistake but still notice was issued and penalty order was passed, which has been affirmed by the appellate authority without proper consideration of claim made by the petitioner. He further submitted that once before issuance of show cause notice or passing of detention as well as seizure order, the genuine tax invoice along with e-way bill was produced and the mistake was rectified, the authorities ought not to have initiated the proceeding. He submitted that the petitioner has duly explained the discrepancy, which has been occurred due to clerical error of his accountant and in support thereof, also filed an affidavit of the accountant but none of the authorities have considered the same. The petitioner has no intention to evade the payment of tax as such the impugned order is not justified in the eyes of law and same is liable to the quashed.

6. In support of his contention, learned counsel for the petitioner has relied upon the Division Bench judgement of this Court in M/s Axpress Logistics India Pvt. Ltd. v. Union of India and others, (Writ Tax No. 602 of 2018, decided on 9.4.2018) and M/s Bhumika Enterprises v. State of UP and others (Writ Tax No. 564 of 2018, decided on 3.4.2018). He submitted that in the aforesaid case, Division Bench of this Court has held that if the tax invoice along with E-way bill are produced before passing the seizure as well as detention order, the proceedings is not justified. He submitted that the present case is identical and is s