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2024 (12) TMI 1226 - HC - GSTChallenge to order passed under Section 129(3) of the Act - Petitioner is owner of goods or not - HELD THAT - Admittedly, the goods were being transported as stock transfer from Orissa branch to Kanpur, Uttar Pradesh. When the goods were intercepted, the requisite documents required under the GST Act, were found to be accompanied therewith. Further, on physical verification, no discrepancy whatsoever was found with regard to quantity of goods in transit, rather mere a discrepancy was found that in the e-way bill, place of transferee was mentioned as Ghaziabad whereas in tax invoice, it was mentioned as Kanpur. In the case in hand, petitioner is both i.e. the consignor and consignee as the goods in question is a stock transfer from State of Orrisa to Kanpur, Uttar Pradesh and, therefore, the petitioner ought to have been treated as the owner of the goods. The Hon ble Apex Court in the case of Arviva Industries (I) Ltd. 2007 (1) TMI 6 - SUPREME COURT has specifically held that the circulars are binding upon the authorities, it is not a case of the respondents that the Circular dated 31.12.2018 has been rescinded or superseded. In view of the judgment of this Court passed in the case of M/s Riya Traders 2023 (1) TMI 1238 - ALLAHABAD HIGH COURT wherein it has specifically been held that once the consignor and consignee of the goods comes forward, then the proceedings should have been initiated against the owner of the goods in accordance with the law. Therefore, the authorities were not justified not recognizing the petitioner as the owner of the goods, which is evident from the material available on record. The impugned orders cannot sustain in the eyes of law and the same are hereby quashed - Petition allowed.
Issues:
Petitioner seeking writ of certiorari to quash impugned orders, mandamus to treat petitioner as owner of goods, challenge to order passed under Section 129(3) of the Act, interpretation of Circular dated 31.12.2018, denial of petitioner's ownership status, reliance on judicial precedents, binding nature of circulars, failure to deny specific pleadings in counter affidavit. Analysis: The petitioner, a GST-registered company engaged in goods related to Air Pump, Gas Compressor, Fans, and Ventilators, sought relief through a writ petition challenging the detention of goods during transit from Orissa to Kanpur due to an error in the e-way bill regarding the delivery place. The petitioner contended that despite meeting all necessary documentation requirements, the authorities failed to recognize them as the owner of the goods, as per the Circular dated 31.12.2018, which deems either the consignor or consignee as the owner if accompanying specified documents. The petitioner argued that the circular should bind the authorities, citing the judgment of the Hon'ble Apex Court in Union of India v. Arviva Industries (I) Ltd. The petitioner emphasized that the authorities should have considered them as the owner of the goods, especially when there was no discrepancy in the quantity of goods during physical verification. Additionally, the petitioner relied on the judgment in M/s Riya Traders v. State of U.P. to support their claim of ownership status. The respondent, represented by the Standing Counsel, supported the impugned order based on the discrepancy in the e-way bill regarding the delivery place. However, the Court, after perusing the records, found that the petitioner, being both the consignor and consignee in the stock transfer, should have been treated as the owner of the goods, as per the Circular dated 31.12.2018. The Court highlighted that the circular was not denied by the respondents and emphasized the binding nature of circulars on authorities. In light of the legal principles and precedents discussed, the Court concluded that the impugned orders were unsustainable in law and proceeded to quash them. The writ petition was allowed, directing the concerned respondent to consider the petitioner as the owner of the goods within a specified timeframe, in accordance with the Circular dated 31.12.2018 and the judgment in M/s. Riya Traders.
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