2024 (1) TMI 73 - HC - GST

Detention of goods on incorrect grounds - detention on the ground that the goods were not accompanied by the valid documents - HELD THAT - It is trite law, settled by a catena of Supreme Court judgments, that the Revenue cannot beat around the bush and keep changing the goal post at each stage. Once the Revenue had taken a particular stand, the same cannot be completely changed and/or supplemented by a different reason or ground. In the present case, it is clear that the detention was made on the ground that the goods were not accompanied by valid documents. However, when the show-cause notice was issued, there is no whisper of any invalid document whatsoever. In fact, the stand was completely changed by the Revenue and this volte face cannot be countenanced by this Court. The detention of goods causes serious prejudice to an assessee and the same can only be done on the basis of specific, valid and reasonable grounds - In the present case, it is quite obvious that at the time of detention, the ground that was stated by the Revenue was incorrect. More so, there was no reason for the Revenue to have detained the goods and the consequential actions that followed, were obviously vitiated. The detention order and the subsequent show-cause notice were bad in law, and accordingly, both are quashed and set-aside - the Revenue is directed to release the goods and the vehicle of the petitioner within a period of 7 days from date - petition allowed.

Summary

Issues involved: Application under Article 226 challenging detention order and show-cause notice based on lack of valid documents during goods transit.

Analysis & Conclusion:
1. The petitioner challenged the detention order and subsequent show-cause notice due to goods not accompanied by valid documents. The Revenue Department changed the reason in the show-cause notice, which is impermissible as per legal principles established by various judgments.

Judgment Details:
2. The petitioner cited a Gujarat High Court judgment and a decision of the Allahabad High Court to support the argument that detention based on lack of valid documents is illegal. Additionally, a Supreme Court decision emphasized that the validity of an order must be judged based on the reasons provided initially.

3. The respondent referred to a Supreme Court case to argue that under the U.P. Goods and Service Tax Act, valid documents are mandatory during goods transit. The respondent stressed on following statutory procedures without interference by the writ Court.

Court's Decision:
4. The Court reiterated that the Revenue cannot change the grounds for detention once a stand is taken. The detention order and show-cause notice were quashed as the reason for detention was altered without valid justification, causing prejudice to the petitioner.

5. The Court found the detention order and subsequent notice to be unlawful, directing the Revenue to release the goods and vehicle within 7 days. Despite the potential for imposing costs on the Revenue, the Court refrained from doing so based on the respondent's counsel's request.