2022 (7) TMI 72 - HC - GST

Detention of vehicles - supply of hydraulic excavators for the purpose of sale within the State - HELD THAT - There is no justification for the detention memo and show cause notice issued in respect of the aforesaid excavator and the same is quashed. The explanation set out in defence of the impugned order is that though the invoice undoubtedly contain the name of a registered dealer as recipient, the place of business set out does not tally with the place of business, as per the records of the Department - The Court, prima facie, appreciates the apprehension of the respondent in this regard as such a practice might well would lead to a situation where a registered dealer may lend his name for supply of material at various locations. Seeing as the matter is pending only at the stage of response to the show cause notice, it would be appropriate that the petitioner furnish its explanation to the show cause notice. Let the same be considered by the respondent and orders passed within seven days from date of receipt of objections/reply, in accordance with law. Petition disposed off.

Summary

Issues:
Challenge of detention orders and show cause notices regarding vehicles carrying excavators; Justification for detention based on delivery to an unrelated place and demonstration purposes; Discrepancy in the place of business on the invoice; Requirement of consignment delivery at an authorized place of business.

Analysis:
The petitioner contested detention orders and show cause notices related to vehicles transporting excavators, alleging that the excavators were meant for sale within the state after suffering Integrated Goods and Service Tax (IGST) at 18% in Pune. Despite providing all documents during an interception, detention orders were issued by the authorities.

The reasons cited for detention included delivering goods to an unrelated place and using an excavator for demonstration purposes, with a statement indicating it would be sold after a week. However, it was confirmed that one of the excavators was indeed for demonstration only, leading to the quashing of the detention memo and show cause notice for that specific excavator.

In another petition, the defense for the detention order was based on a discrepancy where the invoice listed a registered dealer as the recipient, but the place of business did not match department records. The court acknowledged the concern that such practices could enable registered dealers to supply goods at various locations under different names.

The petitioner argued that there is no legal requirement for consignments to be received only at authorized places of business, highlighting instances where deliveries were made to alternate addresses despite the consignee being a registered dealer at a registered place of business. The court directed the petitioner to respond to the show cause notice, with the respondent required to consider the explanation and issue orders within seven days.

Ultimately, the second writ petition was disposed of with instructions for the petitioner to provide a response to the show cause notice within a specified timeframe, emphasizing compliance with the law in further proceedings.