2018 (11) TMI 1571 - HC - GST

Detention of goods - the vehicle driver showed the invoices and e-way bills meant for intra-state transport, that is from Ernakulam to Thalassery and Kozhikode. He could not show the e-way bill from Bangalore to Ernakulam - Held that - If online generation of e-way bill suffices, the Rule would not have insisted on the consignment carrying a copy of the bill or the number in electronic form. At any rate, the issue now concerns only the provisional release and the statute provides an efficacious mechanism for that. Of course, the statutory compliance for the provisional release does visit on the petitioner with certain financial burden, as it has to produce the Bank Guarantee. The Court should adopt a pragmatic view rather than a pedantic one. True. But in the name of interim orders and in the name of our exercising judicial discretion at the threshold, we cannot afford to chip away at the statutory scheme-especially if the scheme has an economic efficacy - The issues the petitioner raised here are the ones to be considered on merits finally-but not at the threshold and definitely not as a prima facie factor. Preserving the petitioner s right to advance all its pleas before the State Tax Officer, the writ petition is disposed off, holding that the authorities will release the goods if the petitioner complies with Section 129(3) of the GST Act.

Summary

Issues:
1. Detention of goods by Assistant State Tax Officer for lack of proper e-way bill.
2. Compliance with Rule 138A of GST Rules for carrying necessary documents during transportation.
3. Provisional release of goods under Section 129(3) of the GST Act.
4. Arguments regarding tax evasion, statutory compliance, and financial burden on petitioner.

Issue 1: Detention of Goods
The petitioner, based in Bangalore, sent a consignment of kitchen cabinets to customers in Thalassery and Kozhikode. The goods were intercepted en route by an Assistant State Tax Officer who demanded the e-way bill from Bangalore to Ernakulam, which the driver failed to produce. The petitioner's counsel argued that there was no tax evasion, and the entire transaction was legitimate.

Issue 2: Compliance with Rule 138A
The Government Pleader highlighted Rule 138A of the GST Rules, which mandates the physical presence of the e-way bill during transportation. The Assistant State Tax Officer detained the goods in compliance with this rule. The rule specifies the documents and devices to be carried by the person in charge of the conveyance, emphasizing the importance of physical copies of the e-way bill.

Issue 3: Provisional Release under Section 129(3)
The petitioner filed a writ petition seeking the release of goods under Section 129(3) of the GST Act. The Government Pleader mentioned that after provisional release, the petitioner could present defenses during adjudication to avoid fines or penalties.

Issue 4: Arguments and Judgment
The petitioner's counsel argued for a pragmatic view, emphasizing that the authorities should consider the circumstances and the lack of tax evasion. However, the Judge acknowledged the genuine grievance of the petitioner but upheld the Assistant State Tax Officer's actions based on Rule 138A. The Judge emphasized the importance of statutory compliance and the necessity of following the law, even if it imposes financial burdens. The Judge disposed of the writ petition, directing the authorities to release the goods upon compliance with Section 129(3) of the GST Act, preserving the petitioner's right to present all defenses before the State Tax Officer during adjudication.