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2022 (5) TMI 845 - HC - GSTDetention of goods alongwith vehicle - generation of two e-way bills - goods was in transit and the delivery was not taken - Sections 68, 129 (3), 130 Central Goods and Service Tax Act 2017 as well as Rules 130 and 138 A of Central Goods and Service Tax Rules, 2017 - HELD THAT - Once before starting the journey e-way bill was generated from Maharastra and ending at Sandila, at the place of ultimate purchaser i.e. K.R. Industries was mentioned, it can not be said that there was any contravention of the provisions of the Act. The department was well aware of the fact that the goods in question was to be delivered at Sandila (U.P.). It is not the case of the department at any stage that the goods which were coming from Maharastra, the delivery of the same was taken from Transporter and the goods were unloaded in the business premisses of the petitioner and thereafter the goods were again sent from the business premisses of the petitioner to its ultimate buyer i.e. K.R. Industries, Sandila. Once the delivery of the goods which has not been taken by the petitioner, has not been disputed by the Revenue as well as validity of the e-way bill generated by Maharastra party, which was valid up to 15.2.2020 i.e. the date of detention and passing of the order under Section 129 (3) of the G.S.T. Act, there cannot be any violation or contravention of the provisions of G.S.T. Act as well as the Rules framed thereunder. The Court finds that there is neither any intention to evade the payment of tax nor any fault nor any contravention of the Act as all valid documents were accompanying with the goods as required under the Act, therefore, the proceedings initiated against the petitioner cannot sustain and are hereby quashed. In the case in hand once the valid document i.e. e-way bill and tax invoice, builty was accompanying with the goods, therefore the authorities ought not to have drag the petitioner in an unnecessary litigation. The writ petition is allowed with cost of Rs. 5000/-.
Issues Involved:
1. Legality of the detention of goods and vehicle by the authorities. 2. Compliance with the provisions of the Central Goods and Services Tax (CGST) Act, 2017 and the CGST Rules, 2017. 3. Justification for the imposition of tax and penalty. 4. Validity of the appellate authority's decision. 5. Determination of any intention to evade tax. Issue-wise Detailed Analysis: 1. Legality of the Detention of Goods and Vehicle by the Authorities: The petitioner, a registered proprietorship engaged in the business of PVC Resin, had its goods detained by the Mobile Squad at Kanpur. The vehicle carrying the goods was intercepted, and despite presenting the necessary documents, including the tax invoice and e-way bill, the authorities issued a show cause notice under Section 129(3) of the CGST Act. The petitioner argued that the goods were accompanied by all requisite documents and that there was no contravention of the Act. The court noted that the e-way bill generated by the Maharashtra party was valid until 15.2.2020, and there was no evidence of the petitioner taking delivery of the goods before reaching the final destination. 2. Compliance with the Provisions of the CGST Act, 2017, and the CGST Rules, 2017: The court referred to Sections 68, 129(3), and 130 of the CGST Act, 2017, and Rules 138 and 138A of the CGST Rules, 2017. Section 68 mandates the inspection of goods in transit, while Section 129 deals with the detention, seizure, and release of goods. Section 130 addresses the confiscation of goods in case of intent to evade tax. Rule 138 requires the generation of an e-way bill for goods exceeding Rs. 50,000 in value. The court observed that the petitioner had complied with these provisions, as the e-way bill and tax invoices were valid and properly documented. 3. Justification for the Imposition of Tax and Penalty: The petitioner contended that there was no intention to evade tax and that the goods were accompanied by valid documents. The court found that the e-way bill generated by the Maharashtra party mentioned the petitioner as the buyer and the final destination as K.R. Industries, Sandila, U.P. The court noted that the authorities had not disputed the validity of the e-way bill or the tax invoices. The court concluded that there was no contravention of the Act, and the imposition of tax and penalty was unjustified. 4. Validity of the Appellate Authority's Decision: The appellate authority had dismissed the petitioner's appeal against the order demanding tax and penalty. The court found that the appellate authority had erred in not considering the case in its true perspective. The court emphasized that the goods were in transit with valid documents, and there was no evidence of any intention to evade tax. The court set aside the appellate authority's decision, stating that the proceedings against the petitioner could not be sustained. 5. Determination of Any Intention to Evade Tax: The court referred to a similar case, Assistant Commissioner (S.T.) and others Vs. M/s Satyam Shivam Paper Pvt. Limited, where the Supreme Court found no intent to evade tax and dismissed the state's appeal. The court in the present case found no intention on the part of the petitioner to evade tax, as all valid documents were accompanying the goods. The court held that the authorities should not have dragged the petitioner into unnecessary litigation. Conclusion: The court allowed the writ petition, quashing the proceedings initiated against the petitioner. The court imposed a cost of Rs. 5000 on the authorities, payable to the petitioner, and directed the respondents to recover the cost from the erring officer. The cost was to be deposited within three months, with an affidavit of compliance to be filed thereafter.
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