2019 (3) TMI 756 - HC - GST

Release of confiscated goods with vehicle - liability of transporter / GTA - section 130 of the U.P. Goods and Services Tax Act, 2017 - case of the petitioner is that he is only the owner of the vehicle which he gives to various transporters as per request made by them for transporting their goods and the petitioner himself is not doing any business with respect to the sale and purchase of goods - Held that - Section 129 and 130 of CA shows that it relates to 'any person' who transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or Rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure shall be released on conditions as laid down in sub clauses (a), (b) and (c) of Sub Section (1) of Section 129 of Act, 2017 - What is, therefore, noticed is that for the application of Sections 129 and 130 of the Act, 2017 it is immaterial that the person proceeded against is not a registered person or a supplier or a taxable person or is not doing any business as provided in any of the sub sections of Section 2 of the Act, 2017. It is enough that he is a 'transporter' of goods and that the goods are being transported and have been seized in transit and if the charge is made out against the transporter, the respondents can proceed to seize such goods including the conveyance. In the present case what we find is that a show cause notice has been issued to the petitioner on 17.12.2018 and it is always open for the petitioner to file a reply to the same. Therefore, the contention of the petitioner that he is not doing any business in respect of sale or purchase of the goods or is not concerned with the goods as he is a mere transporter and is only providing vehicles for transporting and therefore the impugned notice is bad and without any substance and is rejected. Petition dismissed.

Issues Involved:
1. Legality of the notices issued under Section 130 of the U.P. Goods and Services Tax Act, 2017 (UPGST Act, 2017).
2. Petitioners' claim of being mere vehicle owners and not involved in the business of sale or purchase of goods.
3. Application of UPGST Act, 2017 vs. Central Goods and Services Tax Act, 2017 (CGST Act, 2017).
4. Validity and authenticity of E-way bills.
5. Liability for penalties and confiscation under Sections 129 and 130 of the UPGST Act, 2017.
6. Petitioners' right to seek release of confiscated vehicles.

Detailed Analysis:

1. Legality of the Notices Issued under Section 130 of the UPGST Act, 2017:
The petitioners, who are truck owners, challenged the notices issued under Section 130 of the UPGST Act, 2017. They argued that they are not engaged in the sale or purchase of goods, merely providing vehicles for transportation. The court noted that the notices were issued due to alleged tax evasion and fraudulent activities involving the consignors and consignees, not directly targeting the petitioners' business activities.

2. Petitioners' Claim of Being Mere Vehicle Owners:
The petitioners contended that they are not "suppliers" or "taxable persons" as defined under Sections 2(17), 2(105), 2(94), and 2(107) of the UPGST Act, 2017. They argued that their role is limited to providing vehicles for transportation and they should not be held liable for the actions of the consignors and consignees. However, the court emphasized that under Section 122 of the UPGST Act, 2017, any person involved in transporting goods that are liable to confiscation can be penalized, thus including the petitioners within its ambit.

3. Application of UPGST Act, 2017 vs. CGST Act, 2017:
The respondents argued that the CGST Act, 2017 should apply as the goods were transported inter-state. The court agreed, noting that the goods were moved from Siddharth Nagar to Delhi, making the CGST Act applicable. This was supported by the details in the E-way bills and the nature of the transportation.

4. Validity and Authenticity of E-way Bills:
The petitioners presented E-way bills to argue that the consignors and consignees were registered and active. However, the respondents pointed out discrepancies and fraudulent activities associated with the E-way bills, such as multiple registrations using the same mobile number and address. The court found that the E-way bills did not conclusively prove the legitimacy of the transactions or the parties involved.

5. Liability for Penalties and Confiscation under Sections 129 and 130 of the UPGST Act, 2017:
The court highlighted that under Sections 129 and 130, any person transporting goods in contravention of the Act is liable for detention, seizure, and penalties, regardless of their registration status. The petitioners, as transporters, could be held liable if found to be transporting goods in violation of the Act. The court noted that the petitioners had the opportunity to respond to the show cause notices and prove their lack of involvement in the alleged fraud.

6. Petitioners' Right to Seek Release of Confiscated Vehicles:
The petitioners argued that their vehicles should be released upon payment of the penalty. The court acknowledged that under Section 129, the vehicles could be released upon payment of applicable taxes and penalties. However, given the pending criminal investigation and the serious nature of the allegations, the court directed the petitioners to seek release through the trial court.

Conclusion:
The court dismissed all the connected writ petitions, finding no merit in the petitioners' arguments. It upheld the legality of the notices issued under Section 130 of the UPGST Act, 2017 and affirmed the applicability of the CGST Act, 2017. The court emphasized the petitioners' liability under Sections 129 and 130 for transporting goods in contravention of the Act and directed them to seek vehicle release through the appropriate legal channels.

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