2023 (10) TMI 103 - HC - GST

Detention of goods - detention based on statement of driver regarding place of unloading of goods - route for transportation of goods disputed - non-existence of provision for declaring the route for transportation of the goods under GST Act - HELD THAT - Admittedly, the goods in question were sold by the the registered dealer along with genuine documents i.e. tax invoices and e-way bills. At the time of interception it is alleged that driver of the vehicle made statement that goods were to be unloaded at the place which is not mentioned in the tax invoice but at Mainpuri itself. But perusal of the statement of the truck driver, which is prepared and uploaded by the revenue authority in GST MOV-01, it appears that not a single word has been whispered in respect of the goods in question to be unloaded at the place which has not been shown in the tax invoice accompanying the goods. Intent to evade tax - goods along with truck was not on the route of its destination - HELD THAT - Under the GST Act, there is no specific provision which bounds the selling dealer to disclose the route to be taken during transportation of goods or while goods are in transit however there was a provision under VAT Act to disclose the rout during transportation of goods to reach its final destination. Once the legislature itself in its wisdom has chosen to delete the said provision, this Court opined that the authorities were not correct in passing the seizure order even if the vehicle was not on regular route or on different route. The power of detention as well as seizure can be exercised only when the goods were not accompanying with the genuine documents provided under the Act. The genuineness of the documents has not been disputed at any stage - Once the documents accompanying the goods were found to be genuine the goods ought not be have been seized. The impugned order dated 17.8.2021 cannot be sustained in the eyes of law and is hereby quashed - Petition allowed with costs.

Summary

Issues involved:
The issues involved in the judgment are the entertainment of Writ Tax due to non-functionality of G.S.T. Tribunal, challenge to an order under provisions of UP G.S.T. Act, interception and seizure of goods during transit, imposition of penalty, genuineness of accompanying documents, disclosure of transportation route, exercise of power of detention and seizure, and legality of impugned order.

Entertainment of Writ Tax:
The High Court entertained the Writ Tax due to the non-functionality of the G.S.T. Tribunal in the State of Uttar Pradesh as per a Gazette notification. The petitioner challenged an order dated 17.8.2021 passed under the provisions of UP G.S.T. Act, 2017.

Interception and Seizure of Goods:
The petitioner, a registered dealer, engaged in trading of various goods, received orders for supply and prepared tax invoices and E-way bills. The goods were loaded for transportation but intercepted during transit, leading to seizure and imposition of penalty under Section 129 (3) of UP GST Act. The petitioner challenged the order, arguing that genuine documents were accompanying the goods and that the interception was based on incorrect information provided by the driver.

Disclosure of Transportation Route:
The petitioner contended that there was no specific provision under the G.S.T. Act requiring disclosure of the transportation route, unlike the earlier VAT Act. The absence of such a provision meant that no adverse inference could be drawn without cogent material. The Court noted that the authorities erred in passing the seizure order based on the deviation from the regular route.

Exercise of Power of Detention and Seizure:
The Court emphasized that the power of detention and seizure could only be exercised when goods were not accompanied by genuine documents, which was not disputed in this case. The petitioner had complied with providing authentic documents, and the seizure was deemed unjustified.

Legality of Impugned Order:
Citing judgments from other High Courts, the Court held that mechanical detention of goods solely based on minor discrepancies or deviations from the route was unjustified. The impugned order was quashed, and the writ petition was allowed with costs to be paid by the State and refunded to the petitioner. The compliance of the order was to be ensured within three months.