2024 (5) TMI 1260 - HC - GST

Seizure order imposing penalty under Section 129 (3) of the Uttar Pradesh Goods and Service Tax Act, 2017 - order based on the statement given by the Driver of the vehicle who submitted that he was transporting the goods for the second time with the same documents - HELD THAT - In view of the ratio laid down in the judgement in M/s Anandeshwar Traders v. State of U.P. and Others 2021 (1) TMI 1091 - ALLAHABAD HIGH COURT , it is clear that it is the duty of the authorities to ascertain that whether the double movement of the goods has taken place actually. In the present case, no such burden of proof has been discharged by the respondents. From the documents available, it is clear that the respondent authorities have not been able to indicate or prove any mens rea for evasion of tax. The impugned orders dated August 13, 2018, August 14, 2024 and the appellate order dated January 8, 2019 are quashed and set aside - amount of penalty and security that has been deposited by the petitioner to be refunded within a period of six weeks from date. The petition is allowed.

Summary

Issues:
1. Seizure order under the Uttar Pradesh Goods and Service Tax Act, 2017
2. Imposition of penalty under Section 129(3) of the Act
3. Appellate order dated January 8, 2019
4. Non-provision of relevant documents to the petitioner
5. Burden of proof on authorities regarding double movement of goods
6. Lack of evidence of mens rea for tax evasion
7. Quashing of impugned orders and refund of penalty and security

Analysis:

The judgment pertains to a writ petition under Article 226 of the Constitution of India challenging a seizure order, penalty imposition, and an appellate order under the Uttar Pradesh Goods and Service Tax Act, 2017. The petitioner was aggrieved by the seizure order, penalty, and appellate order. The petitioner's counsel argued that the goods matched the invoice and e-way bill, and the detention was based solely on the driver's statement, which was not substantiated by primary evidence in the form of MOV-01. The respondents failed to provide MOV-01 despite multiple requests, diminishing the evidentiary value of the driver's statement.

The court noted that the document provided by the respondents had little evidentiary value due to the absence of MOV-01, emphasizing the importance of proper documentation for legal proceedings. The petitioner relied on a previous judgment by a coordinate Bench, highlighting the authorities' duty to establish the actual occurrence of double movement of goods. The court found that the burden of proof regarding double movement was not discharged by the respondents in the present case.

Furthermore, the court observed that there was no evidence of mens rea for tax evasion by the respondent authorities. Consequently, the impugned orders were quashed, and the penalty and security deposited by the petitioner were directed to be refunded within six weeks. The writ petition was allowed, emphasizing the importance of providing relevant documents for effective defense in legal proceedings.

Additionally, a caution was issued to the authorities regarding the non-assistance and non-provision of relevant documents to the respondent's counsel, leading to the department's failure to defend its case effectively. The Commissioner, State Tax, U.P., was directed to ensure proper assistance to the counsel in the future to avoid such instances. The Registrar Compliance was instructed to communicate this directive to the Commissioner promptly.