2021 (12) TMI 661 - HC - GST

Detention of goods alongwith the vehicle - used/expired e-way bills to evade tax - Section 129 of the Tamil Nadu Goods and Services Tax Act, 2017 - HELD THAT - The petitioners are in the business of transportation of goods. They have to be careful and cautious while transporting goods. They cannot allow the employer who employs them for transportation of the goods to evade tax. If the goods are being removed in the clandestine manner on the strength either expired e-way bills or forged/fabricated invoice, the petitioners are not expected to transport the goods. At the same time, no useful purpose will be served by allowing the vehicles to be detained any longer as the vehicles will loose their intrinsic value. There is also no evidence to suggest that the respective petitioners conspired with the said M/s.Prime Gold International Private Limited to facilitate evasion of tax. There shall be an order for releasing the respective vehicles subject to the respective petitioners paying the amounts determined in the impugned orders - Petition disposed off.

Summary

Issues:
1. Seizure of vehicles for transporting goods with expired e-way bills to evade tax.
2. Dispute over the payment of tax amounts by the vehicle owners.
3. Consideration of releasing the seized vehicles and goods.
4. Evaluation of the petitioners' involvement in tax evasion conspiracy.
5. Determination of the payment required for the release of vehicles.

Analysis:
The judgment by the Madras High Court addresses two writ petitions concerning the seizure of vehicles used for transporting goods with expired e-way bills to evade tax. The petitioners, as owners of the vehicles, claim to have paid 10% of the tax under Section 129 of the Tamil Nadu Goods and Services Tax Act, arguing no further payment is necessary for the release of vehicles and goods. On the other hand, the Additional Government Pleader asserts that a significant amount must be paid by the petitioners based on orders under the TNGST Act and the CGST Act.

The court acknowledges the petitioners' role in transporting goods and emphasizes their responsibility to prevent tax evasion by consignors. Despite the lack of direct evidence implicating the petitioners in the consignor's tax evasion scheme, the court upholds the payment demands specified in the impugned orders. However, the court also recognizes the petitioners' right to appeal these orders under the GST enactments.

After hearing arguments from both sides, the court decides to release the seized vehicles upon payment of the amounts determined in the impugned orders. The specific payment amounts of ?2,46,248/- and ?2,31,508/- for each petitioner are mandated within fifteen days for immediate release of their respective vehicles. Additionally, the court allows the transfer of seized goods to a Government warehouse while preserving the respondents' rights to pursue further legal actions against the petitioners.

In conclusion, the writ petitions are disposed of with the directive for payment and release of vehicles, ensuring compliance with tax regulations and preserving the respondents' legal options for future proceedings.