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TMI Blog2019 (11) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned driver had produced the invoice as well as the eway bill in respect of the goods which were being transported. In order to ensure uniformity in the implementation of the provisions of the CGST Act across the field formations, the Central Board of Indirect Taxes and Customs in exercise of the powers conferred under section 168(1) of the CGST Act, has issued Circular No.41/15/2018-GST dated 13.4.2018, laying down the procedure for inspection of conveyance for inspection of goods in movement and detention, release and confiscation of goods and conveyances and has issued certain instructions - the instructions issued by the Board are binding upon all the officers discharging duties under the GST Acts. Though the person in charge of the conveyance had produced the documents which were statutorily required to be kept with him during the course of transportation of the goods, the vehicle in question was detained on extraneous grounds namely that the lorry receipt issued by the transporter was a photocopy without computerised serial number and contact number details - In terms of the instructions contained in the above circular dated 13 April, 2018, the proper officer, empo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliance upon some unverified statement produced on record with the affidavit-in-reply, which is not permissible in law. Besides, there is force in the submission made by the learned advocate for the petitioner that the destination of the goods will have no bearing on the tax liability of the petitioner, provided the destination is outside the State of Gujarat and, therefore, no mala fide intention can be imputed to the petitioner as the petitioner as well as the recipient of goods, are registered under the GST Acts and both the invoice and e-way bill are found to be in order. It is evident that the person in-charge of the conveyance carrying the goods in question had in his possession, the invoice as well as the e-way bill in respect thereof, and both such documents were produced before the proper officer when the conveyance in question came to be intercepted. It is not the case of the respondents that any discrepancy was found in the aforesaid two documents - Under the circumstances, in the light of the instructions contained in Circular dated 13.4.2018 issued by the Board, it was incumbent upon the second respondent to issue a release form in FORM GST MOV-05 and allow the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relating to the goods including invoice, transport receipt and e-way bill. However, despite the fact that the petitioner had complied with the procedure for movement of goods as stipulated under the GST Acts, by the impugned order, the truck with the goods came to be detained/seized under section 129 of the GST Acts on the ground that the transport receipt was a photocopy and the details filled in the transport receipt were handwritten. 2.2 Subsequently, the second respondent issued a notice demanding payment of tax and penalty under section 129 of the GST Acts for release of the goods. A copy of the statement of the driver in the prescribed format GST MOV 1 was also provided to the petitioner. The petitioner, thereafter, immediately approached the concerned authority and submitted all the documents which are required to accompany the goods under the GST Acts. The e-way bill was admittedly generated prior to the commencement of movement of goods which contained all details relating to invoice as well as the buyer of the goods. Insofar as the transport receipt is concerned, the petitioner explained that it was common practice of the transporter to send scanned copi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansport receipts are concerned, the petitioner has explained that it was a routine practice for the transporter to send scanned copies of the transport receipts which would then be filled and signed by the authorised representative of the transporter at the place of dispatch. However, there is no format of transport receipt prescribed under the GST Acts, and hence, the detention/seizure of the truck with the goods and subsequent demand of tax and penalty under section 129 of the GST Acts on such flimsy ground, even through there was no contravention of the provision of the GST Acts, is wholly without jurisdiction, arbitrary, bad and illegal. 3.3 It was contended that ultimately the objective of section 129 of the GST Acts is to ensure that there is no evasion of tax through unaccounted movement of goods. It was contended that in the case of the petitioner admittedly when the tax invoice was issued and e-way bill was generated through online GST portal containing all details regarding the goods, there was absolutely no possibility of evasion. Moreover, the fact that the petitioner was transporting goods was conveyed to the GST authorities through its online portal pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the goods were being transported from Sihor to Aurangabad. It was emphatically argued that addition of reasons by way of an affidavit is not tenable. In support of such submission, the learned advocate placed reliance upon the decision of the Supreme Court in the Mohinder Singh Gill v. The Chief Election Commissioner, New Delhi , AIR 1978 SC 851, for the proposition that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. 3.7 It was submitted that insofar as inclusion of the goods in the registration certificate under the GST Acts is concerned, a person is registered as a supplier under the GST Acts, there is no concept of goods-wise registration. In fact even in the FORM GST REG-01, which is the form for application of registration, only the top five commodities need to be specified. Thus, it is only in the nature of general information which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that he was not aware of the contents of the statement. It was submitted that this in any case, has absolutely no consequence insofar as the liability of the petitioner is concerned, inasmuch as, the petitioner had disclosed such transaction to be inter-State supplies under the Integrated Goods and Services Tax Act, 2017 and the destination of the goods will have no bearing on the tax liability of the petitioner provided that such destination is outside the State of Gujarat. Thus, there is no question of any mala fide intention on the part of the petitioner. 3.10 The learned advocate next submitted that the petitioner as well as the recipient of the goods, are registered persons under the GST Acts and the invoice as well as the eway bill were admittedly found to be in order, and hence, the detention of the truck with goods is wholly without jurisdiction and illegal. 3.11 The attention of the court was invited to the statement Annexure-II to the affidavit-in-reply filed on behalf of the respondents, on which reliance has been placed by the respondents wherein it has been recorded that the goods were loaded at Sihor in Bhavnagar and were to be unload ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only with a view to evade the payment of tax. 4.1 The learned Assistant Government Pleader, accordingly, urged that the provisions of section 129 of the GGST Act/CGST Act have rightly been invoked in the present case and that the petition being devoid of merits deserves to be dismissed. 4.2 It may be pertinent to note that though the above averments with regard to the petitioner not being registered for the commodities which were being transported have been made in the affidavit-in-reply and have also been reiterated by the learned Assistant Government Pleader while making submissions before this court, the learned Assistant Government Pleader, even after taking instructions from the Instructing Officer who was present in the court room, was not in a position to point out any provision of law which requires a supplier to be registered in respect of the goods in which he deals with, nor was he in a position to point out any statutory requirement regarding the format of lorry receipt. 5. From the facts as emerging from the record, it appears that the vehicles in question came to be intercepted and the impugned orders of detention under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Radio Frequency Identification Device and get the said device embedded on to the conveyance and map the e-way bill to the Radio Frequency Identification Device prior to the movement of goods. ( 5) Notwithstanding anything contained in clause (b) of sub-rule (1), where circumstances so warrant, the Commissioner may, by notification, require the person-incharge of the conveyance to carry the following documents instead of the e-way bill ( a) tax invoice or bill of supply or bill of entry; or ( b) a delivery challan, where the goods are transported for reasons other than by way of supply. 8. On a plain reading of the above rule, it is evident that the documents which are required to be kept by the person in charge of a conveyance while transporting goods are (i) the invoice or bill of supply or delivery challan, as the case may be; and (ii) a copy of the e-way bill. In the present case, admittedly when the trucks in question came to be intercepted, the concerned driver had produced the invoice as well as the eway bill in respect of the goods which were being transported. 9. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pection, he shall record a statement of the person in charge of the conveyance in FORM GST MOV-01. In addition, the proper officer shall issue an order for physical verification/inspection of the conveyance, goods and documents in FORM GST MOV- 02, requiring the person in charge of the conveyance to station the conveyance at the place mentioned in such order and allow the inspection of the goods. The proper officer shall, within twenty four hours of the aforementioned issuance of FORM GST MOV-02, prepare a report in Part A of FORM GST EWB-03 and upload the same on the common portal. ( e) Within a period of three working days from the date of issue of the order in FORM GST MOV-02, the proper officer shall conclude the inspection proceedings, either by himself or through any other proper officer authorised in this behalf. Where circumstances warrant such time to be extended, he shall obtain a written permission in FORM GST MOV-03 from the Commissioner or an officer authorized by him, for extension of time beyond three working days and a copy of the order of extension shall be served on the person in charge of the conveyance. ( f) On c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGST Act, the goods and the conveyance shall be released, by an order in FORM GST MOV-05, after obtaining a bond in FORM GST MOV-08 along with a security in the form of bank guarantee equal to the amount payable under clause (a) or clause (b) of sub-section (1) of section 129 of the CGST Act. The finalisation of the proceedings under section 129 of the CGST Act shall be taken up on priority by the officer concerned and the security provided may be adjusted against the demand arising from such proceedings. ( j) Where any objections are filed against the proposed amount of tax and penalty payable, the proper officer shall consider such objections and thereafter, pass a speaking order in FORM GST MOV-09, quantifying the tax and penalty payable. On payment of such tax and penalty, the goods and conveyance shall be released forthwith by an order in FORM GST MOV-05. The order in FORM GST MOV-09 shall be uploaded on the common portal and the demand accruing from the order shall be added in the electronic liability register and, upon payment of the demand, such register shall be credited by either debiting the electronic cash ledger or the electronic credit ledger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... binding on a court or an assessee, it is not open to the Revenue to raise a contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. ( 2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. ( 3) A show-cause notice and demand contrary to the existing circulars of the Board are ab initio bad. ( 4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars. 12. Since the above decision was rendered in the context of section 37B of the Central Excise Act, reference may be made to the said section, which reads thus:- 37B. Instructions to Central Excise Officers .- The Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963 ), may, if it considers it necessary or expedient so to do for the purpose of uniformi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CGST Act came to be issued in FORM GST MOV-07 proposing to levy tax and penalty and calling upon the petitioner to appear before the second respondent on 9.4.2019 at 11:30 a.m. 16. Thus, though the person in charge of the conveyance had produced the documents which were statutorily required to be kept with him during the course of transportation of the goods, the vehicle in question was detained on extraneous grounds namely that the lorry receipt issued by the transporter was a photocopy without computerised serial number and contact number details. 17. In terms of the instructions contained in the above circular dated 13 April, 2018, the proper officer, empowered to intercept and inspect a conveyance, may intercept any conveyance for verification of documents and/or inspection of goods. In the present case, since no FORM GST MOV-02 has been issued, no Part A of Form GST EWB-03 has been uploaded on the common portal, no FORM GST MOV-04 has been issued and no Part B of Form GST EWB-03 has been uploaded on the common portal, it is clear that the conveyance has been intercepted for verification of documents and not for physical verification inas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y are concerned, it is settled legal position as held by the Supreme Court in Mohinder Singh Gill v. Chief Election Commissioner , (supra) that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise an order bad in the beginning may, by the time it comes to court on account of challenge, get validated by additional grounds later brought out. The court referred to the following extract of its earlier decision in Commissioner of Police v. Gordhandas Bhanji , AIR 1952 SC 16 . Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to be registered under sub-section (1) of section 25 and every person seeking registration under sub-section (3) of section 25 (hereafter in this Chapter referred to as the applicant ) shall, before applying for registration, declare his Permanent Account Number, mobile number, e-mail address, State or Union territory in Part A of FORM GST REG-01 on the common portal, either directly or through a Facilitation Centre notified by the Commissioner: Provided that a person having a unit(s) in a Special Economic Zone or being a Special Economic Zone developer shall make a separate application for registration as a business vertical distinct from his other units located outside the Special Economic Zone: Provided further that every person being an Input Service Distributor shall make a separate application for registration as such Input Service Distributor. ( 2) (a) The Permanent Account Number shall be validated online by the common portal from the database maintained by the Central Board of Direct Taxes. ( b) The mobile number declared under sub-rule (1) shall be verified through a one-time password sent to the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been a different matter if the above goods were shown in the invoice to be waste, parings and plastic scrap taxable at 5%, but when the goods are correctly described at the appropriate taxable rate, there is no violation of any provision of law merely because such goods are not specified in Part B of FORM GST REG-01, inasmuch as the person who seeks registration is required to specify only the top five goods and not all the goods which he seeks to supply. Indubitably, many suppliers would be dealing with more than five goods; however, in terms of column 18 of the prescribed form, a supplier is required to specify only the top five goods with description of the goods and corresponding HSN Code, therefore, the contention that as the petitioner was not registered qua the goods which were being transported there was breach of any provision of law, does not merit acceptance. Moreover, the learned Assistant Government Pleader is not in a position to pinpoint the provision which has been contravened by the petitioner by transporting goods other than those specified in the registration form. 25. Besides, the petitioner has immediately thereafter, amended the registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the State Government is quite perturbing, inasmuch as, the officers under the Act are required to make submissions based upon the legal provisions and not on the conduct of the party. Merely because the petitioner subsequently amended the registration cannot be a ground to submit that reflecting such goods in the registration was mandatory, without referring to the statutory provision which mandates such requirement. 28. From the facts and circumstances noted hereinabove, it is evident that the person in-charge of the conveyance carrying the goods in question had in his possession, the invoice as well as the e-way bill in respect thereof, and both such documents were produced before the proper officer when the conveyance in question came to be intercepted. It is not the case of the respondents that any discrepancy was found in the aforesaid two documents. Under the circumstances, in the light of the instructions contained in Circular dated 13.4.2018 issued by the Board, it was incumbent upon the second respondent to issue a release form in FORM GST MOV-05 and allow the conveyance to move further. However, the conveyance in question has been detained on the gr ..... 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