2024 (7) TMI 55 - HC - GST

Levy of tax and penalty - Release of vehicle - transportation of goods without documents beyond the place of destination and also diversion of the goods to a place other than the destination point - Appeal against the Single Judge s order granted relief to the respondent - HELD THAT - There are force in the contention of the learned advocate appearing for the petitioners that there cannot be any mechanical detention of a consignment in transit solely on the basis of the two reasons as stated by respondent No. 3 in the impugned notice - Merely the direction preferred by the petitioners for delivery of consignment to the place destined for, an inference cannot be drawn with regard to the intention of the petitioners to evade tax. So far as the second ground with regard to the goods being transported to be undervalue is concerned, no material has been placed on record. Even otherwise, as held by this court as well as other High Courts, it is a settled legal position that undervaluation cannot be a ground for seizure of goods in transit by the inspecting authority. In the instant case, there is no such indication. This Appeal being devoid of merits is liable to be and accordingly dismissed, costs having been made easy - Appeal dismissed.

Summary

Issues:
Interpretation of law regarding transportation of goods without proper documents and diversion of goods, scope of writ jurisdiction, fundamental rights of movement and trade, adherence to specified route in consignment documents, legal basis for imposing tax and penalty.

Analysis:
The judgment concerns an intra-Court Appeal challenging a Single Judge's order favoring a respondent in a case involving the interception of a conveyance carrying goods without proper documents. The Appellants argue that the conveyance deviated from the specified route, justifying the authorities' actions. The Respondent justifies the Single Judge's order, emphasizing the need for a deeper examination.

The facts reveal that the conveyance was intercepted away from the destination point, leading to tax liability and penalties imposed by the authorities. The CTO's order highlighted the discrepancies in the documents and the conveyance's movement, justifying the tax and penalty under the GST Act, 2017.

The judgment delves into the legal interpretation of freedom of movement and trade rights under the Constitution. It discusses the natural liberty of movement, the regulation of movement rights, and the importance of free movement for commerce. The judgment emphasizes the need for law to regulate movement rights and restrict them when necessary.

The Court analyzes the legal requirements for furnishing consignment documents and the specified particulars, distinguishing between adherence to the specified route and compulsive adherence. It highlights the absence of a binding rule requiring strict adherence to the impressed route and the non-requirement of reasons for changing the route.

Referring to a comparable case, the judgment cites a Division Bench of the Gujarat High Court's observations on the mechanical detention of goods in transit. The Court concludes that the Appeal lacks merit and dismisses it, appreciating the research work done by a Chamber Intern.

In conclusion, the judgment provides a detailed analysis of the legal principles governing the transportation of goods, freedom of movement, and trade rights under the Constitution. It clarifies the requirements for consignment documents, the regulation of movement rights, and the limitations on imposing tax and penalties without legal basis.