2022 (4) TMI 122 - HC - GST

Release of seized goods - expired E-way bill - whether a vehicle carrying goods for which the e-way bill has expired and the vehicle as well as goods ought to be seized or should the authority concerned release such goods and vehicle by seeking an undertaking from the assessee concerned either the buyer or the seller? - HELD THAT - This Court is of the considered view since the transaction in question is between two registered dealers under the GST Act covered by the e-way bill and other documents where genuineness is not in doubt, vehicles carrying such goods ought to be permitted to continue with such carrying subject of course to either the check gate officer informing the assessing officer where the buyer is located and further direct the buyer to appear before the assessing officer to provide an opportunity to the buyer or seller to take such corrective steps as may be necessary in the matter - since the transaction admittedly is between two registered dealers located in two different states, there is no justification for stoppage in transit of the vehicle and goods. In a case where there is no doubt that a transaction is made between two registered dealers and is covered by the necessary documents including the e-way bill even if the e-way bill has expired just prior to the date of entry into the State, such goods ought not to be stopped and instead an undertaking should be taken from the buyer or the seller and intimation should be provided to the assessing officer of both the parties before whom the buyer or seller may appear to make necessary compliance. Any hindrance in the movement of goods or fray amounts to an obstacle of the development of the nation. The writ petition is disposed of directing the petitioner to appear before the check gate officer and to submit an undertaking or bond before the check gate officer and the check gate officer shall release the vehicle as well as the goods by accepting the undertaking or bond and such information as may be appropriate - petition disposed off.

Summary

Issues:
1. Detention and seizure of vehicle and goods due to expired e-way bill.
2. Impediment on free-flow of goods and services within the Union of India.
3. Legal obligations of transporter and buyer regarding extension of e-way bill.
4. Authority's discretion in seizing goods and vehicle when e-way bill expires.
5. Consideration of genuineness of transaction and necessity of seizure.
6. Balance between transportation of goods and taxation events.
7. Impact on business and necessity to reconsider e-way bill time fixation.
8. Disposal of writ petition with directions for release of vehicle and goods.

Analysis:
1. The petitioner, engaged in selling construction machinery, filed a writ petition seeking release of a vehicle and goods detained due to an expired e-way bill. The vehicle faced technical issues, leading to detention at the entry point into the State of Tripura.
2. The petitioner argued that the seizure hindered the free-flow of goods and services within India, emphasizing that the transaction was between registered dealers and any delay in transit was unwarranted.
3. The Government Advocate contended that the transporter and buyer should have requested an extension for the e-way bill before its expiry, justifying the authority's decision to stop the vehicle and seize the goods.
4. The Court noted previous instances of similar detentions but emphasized the need to encourage free-flow of goods and services for national development. It questioned the necessity of seizing goods when the transaction's genuineness was not in doubt.
5. Considering the transaction between registered dealers and the absence of doubts, the Court ruled that vehicles carrying such goods should be allowed to continue transit, with the assessing officer informed for necessary compliance steps by the buyer or seller.
6. The judgment stressed the importance of balancing goods transportation and taxation events, suggesting that seized goods should be released upon submission of an undertaking or bond by the buyer or seller, with actions initiated for non-compliance.
7. Highlighting the impact on business due to detentions, the Court urged the rule-making authority to reconsider the requirement of fixing time in e-way bills for smoother operations.
8. Ultimately, the writ petition was disposed of, directing the petitioner to submit an undertaking before the check gate officer for the release of the vehicle and goods, with assessing officers informed for further actions against non-compliant dealers.