GIST OF RECENT PRONOUNCEMENTS ON GST (PART-XVIII)

[Dr. Sanjiv Agarwal]

Goods and Services Tax (GST), introduced from July 1, 2017 is seventeen months old now but has resulted in operational and implementation disruptions affecting all stakeholders.  GST law, as drafted and legislated, is not free from the interpretational hassles. GST Council is however, making regular changes to fix the anomalies and hardships faced by taxpayers. 30 meetings of GST Council have been held till 31^st October, 2018.

Taxpayers have already challenged various provisions of GST laws and rules framed thereunder with our 200 writs being filed in different courts. High courts and Supreme court have taken a liberal stand so far in view of the fact that law is new and is yet evolving. However, CBIC may move to Supreme court where the verdict is against the Government. In recent past, CBIC had issued directions to be officers to defend the writs. Further, we have now rulings from Authority for Advance Ruling and Anti-profiteering Authority also. Even the orders from Appellate Authority for Advance Ruling have also started pouring in. Further, one Anti-profiteering case has gone to Delhi High Court wherein the order has been stayed for the interim.

Here are few more judicial pronouncements for information and guidance of various stakeholders. It is expected that the litigation by way of writs is bound to go up as time passes by unless the Government comes out with proactive approach and solutions.

• In Rivigo Services (P.) Ltd. v. State of U.P. 2018 (5) TMI 367 - ALLAHABAD HIGH COURT, where the petitioner was a transport company of Haryana registered under GST law. The branch of petitioner was also declared in Greater Noida, UP which was used for the purpose of loading and unloading of goods which were brought from Delhi for transportation and re-loading in different vehicles to be booked for transportation of goods outside Delhi.

One consigner, dispatched two consignments of goods which were covered by invoices for supply to consignees of Telangana and Dehradun. The aforesaid consignments were loaded from the premises of the consignor in small vehicle and were to be brought to transshipment branch situated at Greater Noida, UP where the goods were to be reloaded in two different trucks for transportation for Telangana and Dehradun. The distance between the business place of consignor and the Greater Noida Branch of transporter was approximately 25-30 Km.

The petitioner had downloaded two national e-way bills, one for Telangana and another for Dehradun and the consignor had duly filled the part of the aforesaid national e-way bill which contains the details of consignor as well as consignee and further the details and description of goods to be supplied. 'Part B' which pertains to details of truck/vehicle number was left blank to be filled by the transporter when the goods would be reloaded in respective trucks at transshipment branch at Greater Noida for further journey upto Telangana and Dehradun respectively.

When the goods were being transported from consignor's premises to transshipment branch in Greater Nodia, the Assistant Commissioner, Sales tax intercepted the vehicle and seized the goods on the ground that 'Part B' of national e-way bills was not filled.

The petitioner challenged the seizure order and penalty noticee by way of writ. On writ, it was held that the Government of India, Ministry of Finance issued clarification with respect of e-way bill system dated 31-3-2018 by which the Government itself has clarified the situation by allowing the transporter/dealer to fill up 'Part B' of the e-way bill when the goods are reloaded in a vehicle which is meant for delivery to the consignee.

In instant case, the vehicle proceeded from consignor's place of business to the transporter's godown and from there the goods were supposed to be reloaded in other vehicles and then to proceed to its ultimate destination, namely, Telangana and Dehradun. Until and unless the goods/vehicle reached at the place of transport company from where it was required to be transported to its ultimate destination, no one can fill up the details of vehicle when admittedly the details are not known or available to the consignor or the driver.

In view of the aforesaid facts and circumstances of the case, the order of seizure passed under section 129(1) was held liable to be set aside and the authorities were to be ordered for release of the goods and the vehicle upon furnishing of the indemnity bond to the extent of proposed tax and penalty.

• In S.B.G.C Logistics v State of U.P. 2018 (5) TMI 697 - ALLAHABAD HIGH COURT, where the assessee, a transporter, was transporting the goods of its customers from New Delhi to Assam and Nagaland. The Competent Authority of the U.P. Goods and Services Tax Department had seized the above goods as well as the vehicle at U.P. Border, Ghaziabad on the ground that the goods were not accompanied with filled Part B of e-way bill.

Being aggrieved of seizure, petitioner challenged the seizure order and penalty notice. On writ, the assessee contended that the goods in question proceeded from the place of business of the customers from New Delhi and required to be brought to his U.P. Border godown at Ghaziabad and thereafter the same were required to be reloaded in bigger trolly/vehicle for the purpose of transportation from Ghaziabad to Assam and Nagaland respectively and when the aforesaid goods proceeded from Delhi and entered into the State of U.P., the same were detained solely on the ground that the goods were not accompanied with filled Part B of e-way bill.

Relying upon the Allahabad High Court in the case of Rivigo Services (P.) Ltd. v. State of U.P. 2018 (5) TMI 367 - ALLAHABAD HIGH COURT,  in which on identical set of facts the Court had set aside the seizure order as well as consequential proceedings initiated under section 129(3) and further in view of the Notification No. 12 of 2018, dated 7-3-2018 and the Clarification dated 31-3-2018, the seized goods in question as well as the vehicle were ordered to be released forthwith. It was held that in the instant case, the seizure proceedings were carried out illegally and the same are wholly without jurisdiction as also against the Government Notification and Central Government decision. Hence, both the seizure order and consequential penalty proceedings under section 129(3) were set aside.

• In VSL Alloys (India) (P.) Ltd. v State of U.P. (2018) 5 TMI 455 (Allahabad); where the petitioner is a private limited company and is engaged in manufacture and supply as well as export of industrial SS Tube, fittings and pipe fittings etc. The petitioner is registered under the provision of GST. The movement involved inter-State movement of goods and the validity of e-way bill showed that it is not valid for movement is pat B is not entered.

The goods, namely Stainless Steel welded pipes which were found loaded on the vehicle during intra-state transportation, were accompanied with e-way bill having Unique Code, however, Part-B of the said e-way bill was not filled up and no vehicle number has been quoted/mentioned. The respondent had directed for physical verification of the goods.

On physical verification, the respondent had found alleged irregularity, that Part-B of e-way bill was incomplete and, therefore, the respondent had detained the vehicle as well as goods by passing an order under Section 129(1) of the Act by which he has assessed the value of goods to the tune of ₹ 5,43,631/-. Consequently, a notice under Section 129(3) of the Act was issued by which the respondent had directing the petitioner to pay a sum of ₹ 97,854/- towards the tax liability as well as the same amount towards the penalty.

Aggrieved by the said seizure order and issuance of the penalty notice, the instant writ petition was been filed.

It was held that where all requisite documents accompanied goods when vehicle had been intercepted and seizure order had been passed, mere non-mentioning of vehicle number in Part-B of e-way bill could not have been a ground for seizure of goods and hence seizure order and show cause notice were quashed. It was directed to release the goods as well as vehicle seized.