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TMI Blog2018 (5) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... fact of the matter is that on the date of incident i.e. 17.12.2017 neither there was any E-way Bill System nor any notification by the Central Government under Rule 138 of the C.G.S.T. Rules 2017 requiring the carrying of a T.D.F. Form or any other such document in the course of inter-State supply/movement of goods, as such, the very basis for passing the impugned orders and taking action against the petitioner as impugned herein is apparently erroneous and illegal. On the relevant date i.e. 17.12.2017 there was no requirement of carrying T.D.F. Form-1 in the case of an inter-State supply of goods. In fact on the relevant date there was no prescription of the documents to be carried in this regard under Rule 138 of the C.G.S.T. Act 2017, accordingly, the seizure and penalty imposed upon the petitioners based on the notification dated 21.7.2017 issued under Rule 138 of the U.P.G.S.T. Act 2017, which was not applicable, is clearly illegal. Validity of notifications - We are faced with two judgments given by the Coordinate Benches of this Court with diametrically opposite conclusions:- a) the earlier judgment in U.P. Kar Adhivakta Sangathan [2018 (5) TMI 460 - ALLAHABAD HIGH C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Goods and Service Tax Laws. The aforesaid aforesaid requirement has been prescribed by the State under Rule 138 of the U.P. Goods and Service Tax Rules (herein short 'GST Rules'). The questions involved in all the writ petitions are identical and for the facility, the facts of Writ Tax No. 41 of 2018 (M/s Om Disposals, Dhanoura Road, Near J.P. Public School, Chandpur, Bijnor, U.P.) are being referred to. We have noticed that the aforesaid writ petition has been filed in the month of January and while entertaining the said writ petition, this Court has granted time to the Standing Counsel for filing counter affidavit but till date no counter affidavit has been filed by any of the respondents. Brief facts of the case are that the petitioner is proprietorship concerned and is engaged in the process of manufacturing of disposable paper cups, plates etc. The petitioner is registered under the provisions of GST Laws and the competent authority empowered to grant registration to a dealer has allotted GSTIN number to the petitioner. The petitioner manufacturing unit is situated near J.P. Public School, Chandpur, Bijnor, U.P. An order was placed by the petitioner to M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State authority has no jurisdiction to prescribe any documentation in respect of transaction which is covered under IGST Act. This issue has not been dealt with by the appellate authority. It is submitted by the petitioner that in view of the fact that the Tribunal contemplated under the GST Act has not yet been constituted and the fact that challenge is to a notification issued by the State of U.P., the petitioner has filed instant writ petition with a prayer that the notification dated 21.07.2017 which provides that E-way bill-01 for importing goods for more than ₹ 50,000/- be quashed. A further prayer has also been made for quashing of the order passed by Mobile Squad and confirmed by the appellate authority. The contention on behalf of the petitioners, in nutshell, is that under Section (xx) and Section (xv) of the IGST, provisions of CGST Act, 2017 pertaining to interception, search, imposition of interest and penalty have been made applicable to transaction covered under the IGST Act. He further submits that Section 2(9) of IGST Act as also Section 2(53) of CGST Act, defines 'Government' to be the 'Central Government'. Rule 138 of the CGST empo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds Transport Corporation. In the said case 220 pieces of Chocholate Display Cooler of M/s Voltas Ltd. were being transported from Pant Nagar, State of Uttarakhand to Radiant Enterprises, Kolkata, West Bengal. The consignment was intercepted at Lucknow in State of U.P. on the ground that original TDF form was not available. Notice under Section 129(3) of U.P. GST Act, 2017 was issued and an order under clause (b) of Section 129(1) for payment of tax and penalty was passed by proper officer. On a challenge being made the Division Bench held as under: A process for initiation of a new indirect taxation regime was put into motion by the Constitution (101st Amendment) Act 2016 dated 8.9.2016 by which Articles 246-A, 269-A, 279-A and other provisions of the Constitution were amended. As per the amended Article 269-A, which pertains to levy and collection of Goods and Services Tax in the course of inter-state trade or commerce such tax shall be levied and collected by the Government of India and such tax such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Service Tax council. Im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) The Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed. (2) The details of documents required to be carried under sub-section (1) shall be validated in such manner as may be prescribed. (3) Where any conveyance referred to in sub-section (1) is intercepted by the proper officer at any place, he may require the person in charge of the said conveyance to produce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods. As would be evident from its reading, the documents which the Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified, are such, as may be prescribed. Now this prescription has been made under Rule 138 of the C.G.S.T. Rules 2017 which reads as under: 138. E-way rule Till such time as an E-way bill system is developed and approved by the Council, the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Be that as it may, the fact of the matter is that on the date of incident i.e. 17.12.2017 neither there was any E-way Bill System nor any notification by the Central Government under Rule 138 of the C.G.S.T. Rules 2017 requiring the carrying of a T.D.F. Form or any other such document in the course of inter-State supply/movement of goods, as such, the very basis for passing the impugned orders and taking action against the petitioner as impugned herein is apparently erroneous and illegal. In view of the above it cannot be said that there was any intent to evade tax. As regards the contention of Sri Rahul Shukla, based on the notification issued under Rule 138 of the U.P.G.S.T. Act 2017, no doubt the said notification also takes into consideration the requirement of carrying documents i.e. T.D.F. Form-1, in respect of inter-State movements of goods, but, in our view it is only the Government of India which is empowered to issue such a notification in respect of inter-State trade under section 20(xv) of the I.G.S.T. Act 2017 read with section 68 of the C.G.S.T. Act 2017 and Rule 138 of the C.G.S.T. Rules 2017 made thereunder, as, the term ''Government' used in Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. For this very reason the judgment dated 29.1.2018 passed by a Coordinate Bench of this Court in Writ Tax No.95 of 2018 does not apply to the instant case, as the challenge therein was to the very power of the State Authorities under U.P.G.S.T. Act 2017 to seize goods involved in inter-state supply. Here the question is whether petitioner was required to carry T.D.F. Form I or not, which we have answered in the negative. As regards the provisions of section 129 U.P.G.S.T. Act 2017 under which the impugned action has been taken, the same is not applicable to an inter-State trade or commerce. By virtue of section 20 of the I.G.S.T. Act 2017 it is section 129 of C.G.S.T. Act 2017 that would apply, but this is not the ground on which we are invalidating the impugned action, as, if it is traceable to the aforesaid provision of C.G.S.T. Act 2017 which is pari materia to the State Act, then mere wrong mentioning of a provision would be too technical a ground for interference. We are invalidating the action on account of absence of any notification by the Central Government under Rule 138 of C.G.S.T. Rules 2017 and in view of incorrect application of notification issued by the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Agarwal submits that the judgment dated 24.08.2017 passed in U.P. Kar Adhivakta Sangathan (supra) has itself failed to notice that the relevant legal provisions particularly the definition of the government under Section 2(53) of the CGST Act and Section 2(9) of the IGST Act. The judgment in U.P. Kar Adhivakta Sangathan (supra) seems to have been delivered in the context of the provisions of the U.P. GST Act and not in the context of the IGST Act or the CGST Act and the transaction covered there-under. Learned counsel for the petitioner submits that the judgment dated 24.08.2017 in U.P. Kar Adhivakta Sangathan (supra), when read in context, cannot be said to have affirmed the power of the State of U.P. to also prescribe documents in respect of interstate transactions that fall under the IGST Act. Prima facie, Shri Rahul Agarwal appears to be correct in submitting that Section 20 (xx) and Section (xv) of the IGST Act, when read along with the Rule 2(53) of the CGST Rules and Rule 138 of the GST Rules, provide authority to the Central Government to specify, by notification, the documents that the person in-charge of a conveyance carrying any consignment of goods shall carry w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is can be done by issuing a notification. (emphasis supplied by us) To ascertain the real controversy before the Division Bench in Kar Adhivakta Sangathan (supra), we directed that the records of Public Interest Litigation No. 38246 of 2017 be placed before us. We have perused the memo of public interest petition and examined the grounds of challenge made to the authority of the State of U.P. to issue notification we find that the submissions now being raised to challenge the authority of the State of U.P. in issuing the notification dated 21.07.2017, were not even raised before the Bench deciding U.P. Kar Adhivakta Sangathan (supra). The submissions now being urged by Mr. Agarwal were never brought to the notice of the Division Bench; the Division Bench had no opportunity to peruse the relevant statutory provisions and adjudicate upon the legality of the notification issued by the State of U.P. in that light. At the same time, the judgment in U.P. Kar Adhivakta Sangathan (supra) has not been considered and discussed by the Lucknow Bench, may be for the reason that it was never placed before it. The judgment in U.P. Kar Adhivakta Sangathan (supra) is an unreported decision, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of law: (a) Whether the judgment of the Division Bench dated 24.08.2017 in U.P. Kar Adhivakta Sangathan (supra), having not noticed the relevant provisions of the IGST Act and the CGST Act and yet affirmed the notification dated 21.07.2017 issued by the State of U.P., does not lay down the correct law and does not constitute binding precedent? (b) Whether the judgment dated 13.04.2018 delivered by another Division Bench at Lucknow in Satyendra Goods Transport Corporation (supra), having not noticed the earlier Division Bench judgment in U.P. Kar Adhivakta Sangathan (supra), can be said to have correctly nullified the impact of the notification dated 21.07.2017 issued by the State of U.P. on the ground that State of U.P. could not have prescribed any E-way bill or TDF in respect of an inter-State transaction under the Goods and Services Tax regime? (c) Whether the State Government is empowered under Rule 138 of U.P. GST Rules to issue a notification prescribing carrying of any forms or documents along with a consignment during inter-State movement? During the course of hearing, it was pointed out by learned counsel for the petitioner that the goods and the vehi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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