2021 (12) TMI 889 - HC - GST

Seizure of goods - goods seized on the ground that U.P. e-way bill was not accompanying the goods - section 129(3) of UPGST Act - HELD THAT - Admittedly, the goods in question were coming from Aurangabad (Maharashtra) to Kanpur Dehat. Along with the goods, documents as prescribed under section 7 of the IGST Act were accompanying and no discrepancy, whatsoever, was found in the said documents. The stand taken in the impugned orders is non-compliance as central e-way bill was not accompanying the goods. On close, scrutiny of the record reveals that in the State of Uttar Pradesh, requirement for central e-way bill was implemented with effect from 01.04.2008. At the time of detention of the goods, there was no requirement for carrying central e-way bill. Therefore, the goods cannot/should not be seized or penalty/tax could not be legally demanded. The Division Bench of this Court in M/S GODREJ AND BOYCE MANUFACTURING CO. LTD., L.G. ELECTRONICS INDIA PVT. LTD., BHARTI AIRTEL LIMITED, M/S GUALA CLOSURES (INDIA) PVT. LTD., M/S. RAS POLYTEX PVT. LIMITED, RIMJHIM ISPAT LIMITED, RIMJHIM ISPAT LIMITED, M/S. GAURANG PRODUCTS PVT. LTD., M/S. ADITYA BIRLA FASHION AND RETAIL LTD., M/S. NAVYUG AIRCONDITIONING AND M/S. PROACTIVE PLAST PVT. LTD. VERSUS STATE OF U.P. AND 02 OTHERS AND STATE OF U.P. AND 3 OTHERS 2018 (9) TMI 1261 - ALLAHABAD HIGH COURT has held that during the period from 01.02.2018 to 31.03.2018, the requirement of e-way bill under the U.P. GST Act read with Rules framed thereunder was unenforceable - thus, neither seizure of goods was justified nor can the penalty be sustained. Petition allowed.

Summary

Issues:
1. Validity of the impugned order dated 16.02.2019
2. Acceptance of the appeal filed by the petitioner
3. Legality of the interception memo dated 06.01.2018 and consequential orders
4. Refund of the amount of ?2,16,000/- along with interest

Issue 1: Validity of the impugned order dated 16.02.2019
The petitioner sought a writ to quash the impugned order dated 16.02.2019 passed by respondent no. 3. The petitioner, a Proprietorship firm registered under the U.P. Goods & Service Tax Act, 2017, had purchased goods that were intercepted en route from Aurangabad to Kanpur Dehat. The goods were seized for not having a U.P. e-way bill. The Court noted that the requirement for a central e-way bill in Uttar Pradesh was effective from 01.04.2008, whereas the goods were seized in January 2008, rendering the seizure unjustified. Citing precedent cases, the Court held the impugned order invalid and quashed it.

Issue 2: Acceptance of the appeal filed by the petitioner
The petitioner requested a writ mandating respondent no. 3 to accept the appeal filed by them. The Court observed that all required documents under the CGST and IGST Act were with the goods, and no discrepancy was found. As the central e-way bill was not mandatory at the time of seizure, the Court found no legal basis for the seizure or the demand for tax and penalty. Relying on legal precedents, the Court ruled in favor of the petitioner, directing the authorities to refund any amount deposited pursuant to the impugned orders.

Issue 3: Legality of the interception memo dated 06.01.2018 and consequential orders
The petitioner challenged the interception memo dated 06.01.2018 and subsequent orders issued under the U.P. Goods and Services Tax Act, 2017. The Court found that the seizure of goods and imposition of penalty were unjustified as the central e-way bill requirement was not applicable at the time of interception. Referring to previous judgments, the Court held that the impugned orders were unsustainable and therefore quashed them.

Issue 4: Refund of the amount of ?2,16,000/- along with interest
The petitioner sought a writ for the refund of ?2,16,000/- along with interest. The Court, after analyzing the facts and legal provisions, allowed the writ petition and directed the authorities to refund any amount deposited by the petitioner pursuant to the impugned orders within one month. The judgment emphasized the non-applicability of the central e-way bill requirement at the time of interception, leading to the quashing of the impugned orders and the refund directive.