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2017 (12) TMI 341 - HC - GSTDetention of goods - absence of Transit Declaration Form (TDF) - mis-description of goods - Refined Palm Oil - penalty - Section 129(1) of UP GST Act - Held that - at the stage of seizure the detaining authority had not applied his mind, nor formed any opinion as to intention to evade tax. The only allegation made in the seizure order is to the effect that the TDF is absent and that the goods have been mis-described. There is no allegation whatsoever as to the intention of the petitioner to evade tax. In absence of any allegation or evasion of tax being made against the petitioner at the stage of detention and seizure and even at the stage of issuance of notice of penalty, it is difficult to sustain the penalty. As to absence of TDF, though it amounted to a breach of the Rules, yet, in the entirety of the facts circumstances of this case, as admitted to the revenue, it does appear that goods were being transported from Rajasthan to Assam. Also, since the goods had reached near the exit point in the State of U.P. and there is no allegation that the goods were being or had been unloaded inside the State of U.P. - the goods were infact being transported from Rajasthan to Assam as disclosed in the Tax Invoice and other documents found accompanying the goods - breach was purely technical. Mis-description of goods - Held that - the goods (whatsoever their correct description be) had originated from outside the State and were being transported outside the State, using the State of U.P. as a transit State, and the goods appear to have been seized near the exit point in State of U.P. the proper officer should have, at most made an endorsement to that effect and allowed the goods to pass through the State of U.P. The seizure order as also the penalty order are wholly unsustainable - petition allowed - decided in favor of petitioner.
Issues Involved:
1. Absence of Transit Declaration Form (TDF). 2. Alleged mis-description of goods. 3. Alleged intention to evade tax. 4. Maintainability of the writ petition in view of alternative remedy. Detailed Analysis: 1. Absence of Transit Declaration Form (TDF): The petitioner, a registered dealer from Rajasthan, transported goods to Assam through U.P. without the required Transit Declaration Form (TDF) as per Rule 138 of the U.P. GST Rules, 2017. The goods were intercepted and detained by the respondent at Gorakhpur. The petitioner argued that the absence of the TDF was due to an inadvertent mistake by the truck driver and that all other necessary documents were in order. The court noted that the goods were near the exit point of U.P., supporting the claim that they were in transit and not intended for sale within U.P. The court found that mere absence of the TDF did not automatically imply tax evasion, especially when other documents supported the transit claim. 2. Alleged Mis-description of Goods: The detaining authority claimed that the goods described as "Refined Palm Oil" in the invoice were actually "Ujala Shudh Deshi Ghee." The petitioner contended that the goods were indeed Refined Palm Oil, and any discrepancy in description was minor and did not affect the transit nature of the goods. The court agreed, stating that any difference in description was irrelevant as long as the goods were merely passing through U.P. and not intended for sale or consumption within the state. The court referenced previous judgments that supported this view, emphasizing that minor discrepancies should not lead to the seizure of goods in transit. 3. Alleged Intention to Evade Tax: The penalty order accused the petitioner of intending to evade tax by unloading the goods in U.P., a claim not made at the time of seizure or in the show-cause notice. The court found no evidence to support this allegation and noted that the petitioner was not given an opportunity to respond to this new claim. The court deemed the allegation an afterthought and unsustainable, highlighting the lack of any prior indication or evidence of intent to evade tax. 4. Maintainability of the Writ Petition in View of Alternative Remedy: The revenue raised a preliminary objection regarding the maintainability of the writ petition, citing the availability of an alternative remedy. The petitioner argued that no appellate authority had been constituted under the Act at the time of seizure and penalty imposition. The court acknowledged this fact and decided not to enforce the bar of alternative remedy, considering the peculiar circumstances of the case and the consent of both parties. Conclusion: The court concluded that the seizure and penalty orders were unsustainable. The absence of the TDF was a technical breach without revenue impact, and the alleged mis-description of goods did not justify seizure. The claim of intent to evade tax was unsupported and an afterthought. Consequently, the court quashed the seizure and penalty orders, directing the release of the goods and vehicle without requiring security. The writ petition was allowed, and no costs were imposed.
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