2022 (7) TMI 1224 - HC - GST

Seizure of goods alongwith the vehicle - case is that the goods were not accompanying with proper document as prescribed under the Act - HELD THAT - Admittedly, air conditioners were coming from Delhi to Ghaziabad and were intercepted by the Mobile Squad, Noida. On that basis, 9 air conditioners were seized and security, along with equal amount of penalty, amounting to Rs. 1,14,124/- was demanded, which was confirmed upto the appellate authority. The only discrepancy pointed out by the seizing authority and the appellate authority is that U.P. e-way bill was not accompanying the goods. Both the authorities lost sight of the fact that during the period from 01.02.2018 to 31.03.2018, requirement of U.P. e-way bill was not applicable to the transactions of the petitioner and therefore, the seizure, demand of security and penalty cannot be justified. The Division Bench of this Court in M/S GODREJ AND BOYCE MANUFACTURING CO. LTD., L.G. ELECTRONICS INDIA PVT. LTD., BHARTI AIRTEL LIMITED, M/S GUALA CLOSURES (INDIA) PVT. LTD., M/S. RAS POLYTEX PVT. LIMITED, RIMJHIM ISPAT LIMITED, RIMJHIM ISPAT LIMITED, M/S. GAURANG PRODUCTS PVT. LTD., M/S. ADITYA BIRLA FASHION AND RETAIL LTD., M/S. NAVYUG AIRCONDITIONING AND M/S. PROACTIVE PLAST PVT. LTD. VERSUS STATE OF U.P. AND 02 OTHERS AND STATE OF U.P. AND 3 OTHERS 2018 (9) TMI 1261 - ALLAHABAD HIGH COURT has held that the goods were not required to accompany with UP e-way bill during the period from 01.02.2018 to 31.03.2018. The air conditioners, which were detained by the respondents on 26.03.2018, and thereafter, levy of security and penalty, cannot be justified. The writ petition is allowed with a cost of Rs. 1,000/-, which shall be deposited within a month from today.

Summary

Issues:
Challenge to seizure order due to absence of U.P. e-way bill accompanying goods during a specific period.

Analysis:
The petitioner, a registered Company, placed a purchase order for air conditioners with IGST charged by M/s Prime Enterprises, New Delhi. The petitioner downloaded the national e-way bill as required by the CGST Rules, with the vehicle number specified. However, the goods were intercepted on the way from Delhi to Ghaziabad for not having a U.P. e-way bill. A show cause notice was issued, demanding security for release of goods and passing a seizure order. The petitioner's appeal against the seizure order was rejected, leading to the filing of the writ petition.

The learned standing counsel supported the order, arguing that the goods lacked the necessary document as per the Act, specifically the U.P. e-way bill. The seizing authority and the appellate authority confirmed the seizure and penalty, emphasizing the absence of the U.P. e-way bill. However, it was overlooked that during the relevant period, from 01.02.2018 to 31.03.2018, the requirement of a U.P. e-way bill was not applicable to the petitioner's transactions. The Division Bench in LG Electronics India Private Limited Vs. State of U.P. & Others clarified this exemption in a previous judgment.

Based on the facts and legal precedents, the Court quashed the impugned orders dated 27.03.2018 and 29.04.2019. It directed the refund of any deposited amount within a month. The writ petition was allowed with a cost imposed on the petitioner, to be deposited within a month, with compliance affidavit due within two months to avoid chamber listing.