2022 (1) TMI 439 - HC - GST

Seeking release of goods without security - It was submitted that since the value of the goods was less than ₹ 50,000/-, therefore, e-way bill was not generated - with regard to three more bags no e-way bill was there and tax invoice was submitted along with the reply to the show cause notice - HELD THAT - If the dealer has submitted the tax invoice along with the reply to the show cause notice, no adverse inference can be drawn. If before the seizure order, the documents were submitted and if the same is not accepted, mere issuance of show cause notice will be redundant. The Court is constrained to observe that the State Government have tried to create an atmosphere for free flow of trade and commerce so that a good business environment can be developed in the State of Uttar Pradesh which can be used for development purpose but the State Authorities in their whims and fencing are bend upon to harass the trading community of the State. The present case is a glaring example of the mischievous of the State Authorities which needs to be checked at the end of the State Government immediately. The writ petition is allowed with cost of ₹ 20,000/- (twenty thousand) payable to the petitioner. The cost shall be paid within a period of one month from today. The respondents are at liberty to recover the said cost from the erring officer.

Summary

Issues:
Challenge to order rejecting appeal and confirming seizure under UPGST Act, 2017.

Analysis:
The petitioner challenged the order rejecting their appeal and confirming the seizure of goods under the UPGST Act, 2017. The petitioner, a registered dealer, sold Betel Nut Products to two different dealers with proper tax invoices and e-way bills. However, three bags were found without an e-way bill during an interception. The petitioner explained that the missing e-way bill was due to an oversight by the transporter. The authorities contended that the lack of an e-way bill for three bags constituted a violation of the Act. The Court noted that the petitioner had submitted the tax invoice for the three bags along with the reply to the show cause notice, meeting the requirements of the Act. The authorities were criticized for not accepting the submitted documents and for unjustly seizing the goods.

The Court emphasized that the authorities must act fairly and consider submissions made in response to show cause notices. It was highlighted that the value of the transaction being less than fifty thousand rupees did not necessitate an e-way bill as per Rule 138. The Court rejected the argument that discrepancies in a consignment warranted the seizure of the entire shipment, emphasizing that each transaction should be evaluated independently. The judgment quashed the orders confirming the seizure and demanded security for the release of goods.

The Court further criticized the State Authorities for creating obstacles in trade and commerce, stressing the importance of a conducive business environment for the state's development. The judgment allowed the writ petition with costs payable to the petitioner and directed the recovery of costs from the responsible officer. Any amounts deposited as per the impugned order were to be refunded, and a copy of the judgment was to be forwarded to relevant authorities for necessary action.

In conclusion, the judgment addressed the issues raised by the petitioner regarding the seizure of goods under the UPGST Act, 2017, emphasizing fair treatment, adherence to statutory provisions, and the need to support a favorable business environment in the state.