NO PROVISION TO DISCLOSE THE ROUTE OF TRANSPORTATION OF GOODS

[Mr. M. GOVINDARAJAN]

In M/S OM PRAKASH KULDEEP KUMAR VERSUS ADDITIONAL COMMISSIONER GRADE-2 AND ANOTHER - 2023 (10) TMI 103 - ALLAHABAD HIGH COURT , the petitioner is engaging in trading of Bidi, match box, tobacco etc.  Usually the petitioner receives orders from their clients.  On receipt of the orders the petitioner will prepare the tax invoices and deliver the same to clients.  The petitioner in this case received two orders from-

• Satish Chand Shelendra Kumar, Karahal Road, Mainpuri; and
• Pawani Provisions Store, G.T. Road Chhibramau, Kannauj,

for the supply of bidi, match box and tobacco.  The petitioner prepared the tax invoices on 16.01.2020  and two E-way Bills.

The said goods were loaded in a truck on Truck no. UP 76 K 5205 for transportation from Bewar Mainpuri to Karahal Mainpuri and Chhibramau, Kannauj.   During the journey the vehicle was intercepted by the GST Authorities.  The required documents such as tax invoice, E-way bill were produced to the Authorities.  Form GST MOV - 1 was prepared on 17.01.2020.  The statement of the driver of the vehicle was obtained.  Thereafter the seizure/detention order was passed by the Authority in Form GST MOV - 6 on 17.01.2020.  Thereafter form GST MOV 07 was passed and being not satisfied with the reply of the petitioner GST MOV-09 dated 17.1.2020 was passed under Section 129 (3) of UP GST Act.  The petitioner deposited a sum of Rs.2.36 lakhs under protest.   Being aggrieved against the said order the petitioner filed an appeal before the First Appellate Authority. The First Appellate Authority confirmed the order of the Adjudicating Authority.

Against the order of the First Appellate Authority the petitioner filed the present writ petition before the High Court in the absence of GST Tribunal.  The petitioner submitted the following before the High Court-

• The goods in question were accompanying with the genuine documents such as tax invoices and e-way bills and were on its onward journey to its final destination.
• The said goods have wrongly been intercepted and vehicle was seized.
• Thereafter penalty has been imposed on the ground that driver of the vehicle, at the time of interception, has produced only one tax invoice and e-way bill whereas the documents with regard to other item was not produced.
• It has wrongly been mentioned that the truck driver has given statement that the goods were to be unloaded in Mainpuri itself in the garb of accompanying documents.
• The said fact is incorrect as statement of the truck driver has been recorded in GST MOV-01 which does not support the case of the respondent authority.
• There is no specific provision to declare the route which is to be taken for transporting the goods.
• In the earlier applicable VAT Act, there was a provision for declaring the route for transportation of the goods.
• In the absence of any specific provisions under the G.S.T. Act, no adverse inference can be drawn by the authorities without there being any cogent material on record.

The Revenue contended that the impugned order is correct and the writ petition is liable to be dismissed.  The Revenue submitted that at the time of interception of vehicle, the truck driver has given statement that the goods were to be unloaded at Mainpuri in the garb of accompanying documents, which is in contravention of the provisions of the Act.

The High Court considered the submissions of the petitioner and the Revenue.  The High Court observed that the goods in question were sold by the registered dealer along with genuine documents i.e. tax invoices and e-way bills.  At the time of interception it is alleged that driver of the vehicle made statement that goods were to be unloaded at the place which is not mentioned in the tax invoice but at Mainpuri itself. But perusal of the statement of the truck driver, which is prepared and uploaded by the revenue authority in GST MOV-01, it appears that not a single word has been whispered in respect of the goods in question to be unloaded at the place which has not been shown in the tax invoice accompanying the goods.

The High Court further observed that  another issue raised that the goods along with truck was not on the route of its destination, therefore, there was intention to evade tax.  The High Court found truth in the submissions of the petitioner that under the GST Act, there is no specific provision which bounds the selling dealer to disclose the route to be taken during transportation of goods or while goods are in transit however there was a provision under VAT Act to disclose the rout during transportation of goods to reach its final destination.

The High Court was of the opinion that once the legislature itself in its wisdom has chosen to delete the said provision, the authorities were not correct in passing the seizure order even if the vehicle was not on regular route or on different route.  The power of detention as well as seizure can be exercised only when the goods were not accompanying with the genuine documents provided under the Act.  In this case the genuineness of the documents has not been disputed at any stage.  The High Court held that once the documents accompanying the goods were found to be genuine the goods ought not to have been seized.

The High Court analyzed the two case laws relied on by the petitioner.

• M/S. KARNATAKA TRADERS VERSUS STATE OF GUJARAT - 2022 (1) TMI 381 - GUJARAT HIGH COURT .

In this case it was alleged that Vehicle was intercepted while it was travelling to the different direction than the direction of destination or way to the destination. So it is clear that the goods were not moving to the place destined for.  Hence it appears that the goods is being transported with intention to evade tax.

The High Court found that 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.

• VIJAY METAL VERSUS THE DEPUTY COMMERCIAL TAX OFFICER - 2021 (5) TMI 166 - TELANGANA HIGH COURT , the High Court framed the question to decide in this writ petition is as to whether it is mandatory that when a truck is carrying goods of 2 e-Way Bills then it has to unload the goods of shorter distance first and then the goods of longer distance or goods of higher weight first and then goods of lesser weight?  The answer is certainly NO. There is no law/rule which says that the goods to be unloaded at shorter distance must be offloaded first or the goods of higher weight to be unloaded first. Unless there is something on record to prove that there was Bad Intention or intent to evade tax, such action of detention is bad in law and therefore cannot sustain.

The High Court held that the impugned order dated 17.8.2021 cannot be sustained in the eyes of law and quashed the impugned order.  The High Court further directed the department to pay Rs.5,000/- towards cost to the petitioner and the same may be recovered from the pay and allowances of the erring officer and also directed to refund the amount deposited by the petitioner under protest.