2024 (8) TMI 772 - HC - GST

Seizure order - detention of goods on the ground that the goods were not accompanying with proper documents as require under the Act as E-way bill - HELD THAT - It is admitted between the parties that at the time of interception of the goods, no E-way bill in respect of tax invoice no. 22 dated 12.7.2019 was produced, therefore, the goods were detained, however before the seizure order could be passed and after issuance of show cause notice, the E-way bill in respect of tax invoice no. 22 dated 12.7.2019 was produced, in which no discrepancy was pointed out by any of the respondent authorities. The only ground for detention being taken by the respondent authority is that once the goods in question was not accompanying with proper documents, there was intention to avoid the payment of tax. In the case of M/S HAWKINS COOKERS LIMITED VERSUS STATE OF U.P. AND 2 OTHERS 2024 (2) TMI 760 - ALLAHABAD HIGH COURT the goods were seized on the ground that no document was available along with the goods, therefore, the proceedings under Section 29 of the Act was justified by the Court. However, in the present case, the consignment of two different dealers were loaded in the vehicle and two separate tax invoices i.e. tax invoice no. 21 dated 12.7.2019 and tax invoice no. 22 dated 12.7.2019 were generated. So far as tax invoice no. 21 dated 12.7.2019 is concerned, there is no dispute in this respect. However so far as tax invoice no. 22 dated 12.7.2019 is concerned, admittedly, E-way bill was not produced at the time of detention and the same was produced before passing the seizure order. The GST authorities have full mechanism as well as power that after detaining the goods, if the same was not accompanying with the proper documents, the authority could have made survey of the business premises of the petitioner to find out the correctness of transaction but the respondent authorities have chosen in their wisdom not doing so. Once E-way bill was produced before the seizure order could be passed, it would not be said that any contravention of the provision of the Act have been made by the petitioner. The impugned order dated 14.7.2019 passed by the Assistant Commissioner, Mobile Squad -11, Kanpur Nagar and the order dated 18.11.2021 passed by Additional Commissioner, SGST Grade -II, Appeal IV, Kanpur Nagar are hereby quashed - Petition allowed.

Summary

Issues:
Challenge to seizure orders and tax liability based on lack of E-way bill for a specific invoice.
Interpretation of intention to avoid tax payment based on absence of proper documents.
Applicability of precedents in similar cases to the current situation.

Analysis:
The petitioner challenged seizure orders and tax liability due to the absence of an E-way bill for a specific invoice. The petitioner, a distributor of iron and steel, purchased goods from a supplier in Punjab and sold them in Uttar Pradesh. The petitioner's vehicle was intercepted without the E-way bill for one invoice. The respondent imposed tax liability and penalty, alleging an intention to evade tax. The petitioner argued that the E-way bill was submitted before the seizure order, indicating no intent to avoid tax. The respondent contended that the absence of proper documents justified the proceedings.

The petitioner cited precedents to support their argument, emphasizing compliance efforts and lack of tax evasion intent. The respondent relied on other judgments to justify the proceedings, emphasizing the importance of proper documentation. The court examined the facts and compared them to the cited judgments to determine their relevance.

In the case analysis, the court differentiated the present case from the cited precedents. It noted that the E-way bill was eventually produced before the seizure order, resolving any discrepancies. The court highlighted the authorities' power to verify transactions and noted the lack of such action in this case. Ultimately, the court found no contravention of the law by the petitioner and quashed the seizure orders and tax liability.

The court's decision emphasized the importance of proper documentation but also recognized the petitioner's efforts to rectify any deficiencies promptly. The judgment highlighted the need for authorities to conduct thorough investigations before imposing tax liabilities. The court ordered the refund of any deposited amounts in line with the quashed orders, ensuring justice for the petitioner.