2025 (1) TMI 207 - HC - GST

Challenge to proceedings under Section 129 of GST Act - Seizure of goods - E-Way Bill not filled - intent to evade tax or not - HELD THAT - The facts which are admitted and disclosed from the records are these. There was no discrepancy in the goods which were physically found at the time of inspection and details of goods recorded in the E-Way Bill available with the driver of the vehicle. The authorities below have not found any intent to evade tax. This Court has set its face against initiation of proceedings under Section 129 of GST Act in the wake of mere technical breaches. When substantial compliance of the provisions is disclosed and when the physical inspection of goods tallies with the goods declared in the E-Way Bill and no intent of tax evasion is made out, proceedings under Section 129 of GST Act become vitiated. In VSL ALLOYS (INDIA) PVT. LTD. VERSUS STATE OF U.P. AND ANOTHER 2018 (5) TMI 455 - ALLAHABAD HIGH COURT this Court has held ' In the present case, all the documents were accompanied the goods, details are duly mentioned which reflects from the perusal of the documents. Merely of none mentioning of the vehicle no. in Part-B cannot be a ground for seizure of the goods. We hold that the order of seizure is totally illegal and once the petitioner has placed the material and evidence with regard to its claim, it was obligatory on the part of the respondent no.2 to consider and pass an appropriate reasoned order. In this case, no reasons are assigned nor any discussion is mentioned in the impugned order of seizure and notice of penalty.' Conclusion - When substantial compliance of the provisions is disclosed and when the physical inspection of goods tallies with the goods declared in the E-Way Bill and no intent of tax evasion is made out, proceedings under Section 129 of GST Act become vitiated. The impugned order dated 22.12.2023 passed by the respondent no. 2, Additional Commissioner, Commercial Tax Grade-2 (Appeal)-I, State Tax, Noida is unsustainable and is quashed - petition allowed.

Summary

In the case before the Allahabad High Court, presided over by Hon'ble Ajay Bhanot, J., the petitioner challenged the proceedings initiated under Section 129 of the GST Act following the interception of a vehicle carrying goods. The revenue authorities had found that a part of the E-Way Bill was not filled, prompting them to ask the assessee to show cause. However, upon physical inspection, the goods matched the description in the E-Way Bill, and no tax evasion intent was detected.

The adjudicating and appellate authorities dismissed the assessee's submissions, upholding the impugned order. The court emphasized that mere technical breaches should not trigger proceedings under Section 129 if substantial compliance is evident and no tax evasion intent is found. The court referenced its previous judgment in VSL Alloys (India) Pvt. Ltd. Vs State of U.P., which held that the absence of vehicle details in Part-B of the E-Way Bill alone cannot justify goods seizure.

The court found the impugned order dated 22.12.2023 by the Additional Commissioner, Commercial Tax Grade-2 (Appeal)-I, State Tax, Noida, unsustainable and quashed it, allowing the petition.