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GST - Non-accompaniment of e-way bill - no justification for passing orders of seizure of goods/vehicle and tax demand/penalty: HC

Published: Jun 08, 2018

By TIOL News Service

ALLAHABAD, JUNE 08, 2018: FACTS: Petitioner is a registered firm engaged in business of Iron and Steel goods. Some goods were sold to one M/s Arjun Dev & Company, Delhi, who is also a registered company against the invoice No. 0003 dated 5.4.2018 after charging IGST @ 18%. The goods were handed over to the transporter who loaded the same in a vehicle No. UP 13 AT 1153 on 4.5.2018.

Petitioner dispatched the goods without generating the E-way bill.

When the vehicle crossed Yamuna Express Way it was intercepted by the respondent no.3 Assistant Commissioner, State Tax, Mobile Squad, Unit-II, Noida at 1.30 a.m. on 5.5.2018 solely on the ground that the goods were not accompanied with E-way bill.

When the proprietor of the petitioner's firm received the information about interception of the vehicle, he immediately generated E-way bill on 5.5.2018 at 11.55 a.m. and the aforesaid E-way bill was furnished to the respondent at 2.30 pm.

The submission of the learned counsel for the petitioner is that though the petitioner has furnished the E-way bill before the respondent no.3 prior to the seizure proceedings and seizure order, but the respondent no.3 has passed the seizure order and a consequential notice u/s 129(3) of the UPGST Act was issued requiring the petitioner to deposit the tax as well as the penalty to the tune of Rs.46,119/- each.

An order under Section 129(3) was also passed on the same day i.e. 5.5.2018 in which no time has not been mentioned by the respondent no.3.

Petitioner contends that both the impugned seizure order as well as the order passed under Section 129(3) are completely without jurisdiction, arbitrary and are nothing but clearly a misuse of power by the respondent no.3.

Petitioner has submitted that the goods were intercepted at 1.30 a.m. on 5.5.2018 whereas the E-way bill was generated on the same day at 11.55 a.m. which was furnished before the respondent no.3 but reasons best known to the respondent no.3, a seizure order and consequential penalty order has been passed. Counsel for the petitioner has submitted that once E-way bill was generated after interception of the goods, but before seizure order is passed, then the goods cannot be seized as is held by this Court in the case of Axpress Logistics India Pvt. Ltd.

Reliance is also placed on the Circular 41/15/2018-GSTdated 13.4.2018 distinguishing between interception and detention and contends that since petitioner has furnished the E-way bill prior to detention and seizure of goods, no seizure order can legally be passed nor penalty can be asked.

Held:

+ We find substance in the submission of the learned counsel for the petitioner that while issuing the interception memo the respondent no.3 has mentioned the time being 1.30 a.m. on 5.5.2018 and directed the petitioner to appear on 6.5.2018 at 10 a.m. for physical verification, however while preparing the verification record (Part-A and Part-B) no time has been mentioned.

+ Petitioner has also brought to notice that the respondent no.3, with malice intention, has deliberately not mentioned the time in either of the orders passed being the seizure order under section 129(1) and penalty under Section 129(3).

+ Petitioner has submitted that since the petitioner has placed the E-way bill on 5.5.2018 itself the respondent no.3 has illegally proceeded to pass the impugned orders before any physical verification done.

+ We find substance in the submission of the petitioner. Once the E-way bill is produced and other documents clearly indicates that the goods belong to the registered dealer and the IGST has been charged there remains no justification in detaining and seizing the goods and asking the penalty.

Conclusion:

+ Seizure order dated 5.5.2018 quashed as well as the consequential penalty order dated 5.5.2018.

+ Respondent no.3 directed to immediately release the goods and vehicle in favour of the petitioner.

The Petition was allowed.

(See 2018-TIOL-48-HC-ALL-GST)