2019 (2) TMI 125 - HC - GST

Detention of vehicle along with goods - the driver of the vehicle did not extend proper cooperation - specific stand taken by the writ petitioner is that the driver without knowing the correct route had taken a wrong turn and headed towards Sivakasi - evasion taking place or not? - Held that - It is not in dispute that the bill is addressed only to the writ petitioner's principal office at Sivakasi; delivery alone is to be made at Virudhunagar. Even if by mistake, a wrong instruction had been given to the driver of the vehicle to head towards Sivakasi. Still it would not really matter. When the writ petitioner is a registered dealer, when the tax in respect of the goods have already been remitted and when the transportation of goods is duly covered by proper documentation, the respondent ought to have taken a sympathetic and indulgent view of the lapse committed by the driver of the vehicle - detention order dated 28.12.2018 and the order dated 11.01.2019 suffer from vice of gross unreasonableness and disproportionality - By directing the writ petitioner to pay a sum of ₹ 5,000/- towards fine to the respondent, the orders impugned in this writ petition stands quashed - petition allowed.

Summary

Issues:
Detention of goods under the Tamil Nadu Goods and Services Tax Act, 2017 due to incorrect transportation route and lack of cooperation from the driver.

Analysis:
The writ petitioner, an authorized dealer for Bajaj Auto Limited, registered under the Goods and Service Tax Act, placed an order for 40 two-wheelers. The vehicle carrying the goods was intercepted by the respondent roving squad en route to Sivakasi instead of stopping at Virudhunagar, leading to detention and a penalty of ?18,96,000. The respondent alleged that the driver moved towards Sivakasi on the instructions of a representative of the writ petitioner. However, the driver, who did not know English or Tamil, claimed to have taken a wrong turn due to incorrect instructions. Despite the mistake, there was no tax evasion, and all necessary documents were in order.

The court emphasized that the detention order and penalty were disproportionate to the offense. The respondent should have directed the vehicle back to Virudhunagar instead of being harsh. The circular from the Government of India urged officials to overlook minor lapses and impose a nominal fine of ?500, which was not considered in this case. The nature of the goods, two-wheelers requiring proper registration, indicated that the writ petitioner could not evade statutory obligations. The court accepted the writ petitioner's offer to pay a fine of ?5,000, quashing the impugned orders and ordering the immediate release of the goods and vehicle.

In conclusion, the court found the respondent's actions unreasonable and disproportionate, emphasizing the need for statutory powers to be exercised reasonably. The judgment highlights the importance of considering the circumstances and intent behind alleged violations, especially in cases where there is no evidence of tax evasion or deliberate non-compliance with statutory requirements.