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TMI Blog2020 (11) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. Website bearing e-Way Bill No.1411 9672 7806 dt.26.01.2020. 4. Thereafter, the vendor entrusted the goods to a transporter owning vehicle No.TS-12-UB-6140 for transporting the goods from the vendor's factory at Chegunta Village and Mandal, Medak District, Telangana State to the petitioner's premises at Proddatur, Andhra Pradesh. 5. Petitioner contends that goods were loaded on the said vehicle on 26.01.2020 during the afternoon hours, and as heavy vehicles were not allowed on the city roads of Hyderabad (through which the vehicle has to pass through) during day-light hours, the lorry started for its destination on 27.01.2020 duly accompanied by the Tax Invoice and e-Way Bills, etc. 6. According to petitioner, after entrusting the goods to the transporter, but before petitioner received the goods, the petitioner got an order for supply of the said goods from M/s.Laxmi Narasimha Constructions, Proddatur, and that he accordingly sold the same to the said buyer by raising tax invoice No.SIT - 537 dt.27.01.2020 on the buyer and also generating e-Way Bill No.171196790568 dt.27.01.2020 for transportation of the said goods from the petitioner's business premises at Proddatur to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomer/buyer, viz., M/s.Laxmi Narasimha Constructions, Proddatur, the goods and the vehicle were directed to the Job work site of the purchaser by name, M/s. JVS Switchgear LLP at Katedan, and also enclosed copy of necessary documents. 14. No order was passed by the 1st respondent after considering petitioner's reply dt.28.01.2020 to the show-cause notice issued to petitioner. 15. Since the transporter was pressurizing the petitioner to get his vehicle released, the petitioner paid on 30.1.2020 under protest total tax and penalty amounting to Rs. 4,30,778/- demanded by the 1st respondent, and the petitioner also gave a letter on 30.01.2020 stating so. 16. The detained goods and the vehicle were then released after payment of tax and penalty on 30.01.2020 at 02:00 p.m. Petitioner's contentions 17. The petitioner contends that there was no intention or attempt on his part to evade tax, and to save unnecessary transport charges and also time which would have been incurred by first transporting goods from (i) the site of the vendor of petitioner in Telangana to petitioner's business place in Andhra Pradesh, and (ii) then again from petitioner's place in Andhra Pradesh to its custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent opposing grant of relief to petitioner. 24. It is contended that detention order dt.27.01.2020 and subsequent orders dt.04.02.2020 collecting tax and penalty are appealable orders under Section 107 of the S.G.S.T. Act, 2017, and the petitioner did not file any such appeal, and so, the present Writ Petition ought not to be entertained. 25. But, along with the counter-affidavit, no order allegedly passed on 04.02.2020 against the petitioner is enclosed. 26. It is next contended that at the time of inspection of the vehicle on 27.01.2020, the driver of the vehicle produced invoice as well as e- Way Bill with regard to the consignment of goods being carried by him, and they showed that goods were being transported from M/s. Jeevaka Industries Private Limited, Chegunta Mandal, Medak District, Telangana to the petitioner at its address in Proddatur, Andhra Pradesh. 27. According to the 1st respondent, the goods vehicle was found at Katedan, Hyderabad and this gave room for suspicion about the bona fides of the transaction; and when the driver of the vehicle was questioned why the vehicle was stationed at that place he allegedly informed that the goods vehicle was stopped as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent followed the CGST and SGST Act and the Rules, and the 1st respondent was justified in detaining the vehicle and the goods, and there was no violation of due process of law. 37. It is contended that the goods vehicle was found at destination not being the one mentioned in the invoice and also the e-Way Bill of the supplier, and so, action was rightly taken under Section 129 of the CGST Act for collecting tax and penalty. 38. It was also alleged that petitioner did not contend at the time of issuance of notice in FORM MOV - 06 and while filing objections to the notice about the collection of tax and penalty forcibly, but such a contention is raised for the first time in this Court as an after-thought. 39. It was contended that telephonic instructions of petitioner to the driver of goods vehicle to deliver the goods at the place of the shop work's site in Katedan, Hyderabad cannot be accepted for want of evidence, and that it is a self-serving one only to cover up the laches. 40. It was also alleged that if the petitioner in fact received order from his buyer while goods are in transit and the goods were to be delivered at the shop work site in Katedan, Hyderabad, Telan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty; (b) on payment of the applicable tax and penalty equal to the fifty per cent. of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty; (c)upon furnishing a security equivalent to the amount payable under clause (a) or clause (b)in such form and manner as may be prescribed: Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods. (2)The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances. (3)The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b)or clause (c). (4)No tax, interest or penalty shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a conveyance carrying any consignment of goods of value exceeding http://www.judis.nic.in Rs. 50,000/- should carry a copy of documents viz., invoice/bill of supply/delivery challan/bill of entry and a valid e-way bill in physical or electronic form for verification. In case such person does not carry the mentioned documents, there is no doubt that a contravention of the provisions of the law takes place and the provisions of section 129 and section 130 of the CGST Act are invocable. Further, it may be noted that the non-furnishing of information in Part B of FORM GSTEWB-01 amounts to the e-way bill becoming not a valid document for the movement of goods by road as per Explanation (2) to rule 138(3) of the CGST Rules, except in the case where the goods are transported for a distance of upto fifty kilometres within the State or Union territory to or from the place of business of the transporter to the place of business of the consignor or the consignee, as the case may be. 4. Whereas, section 129 of the CGST Act provides for detention and seizure of goods and conveyances and their release on the payment of requisite tax and penalty in cases where such goods are transported in cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the Circular noted above, indicates to me that the Department does not paint all violations/transgressions with the same brush and makes a distinction between serious and substantive violations and those that are minor/procedural in nature." "101. We are of the view that at the time of detention and seizure of goods or conveyance, the first thing the authorities need to look into closely is the nature of the contravention of the provisions of the Act or the Rules. The second step in the process for the authorities to examine closely is whether such contravention of the provisions of the Act or the Rules was with an intent to evade the payment of tax. Section 135 of the Act provides for presumption of culpable mental state but such presumption is available to the department only in the cases of prosecution and not for the purpose of Section 130 of the Act. What we are trying to convey is that in a given case, the contravention may be quite trivial or may not be of such a magnitude which by itself would be sufficient to take the view that the contravention was with the necessary intent to evade payment of tax. 102. In such circumstances, referred to above, we propose to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 56. We may note that in the Show cause notice dt.27.1.2020 issued to the petitioner, the only reason assigned by the 1st respondent was that 'wrong destination is noticed'. 57. In the statement allegedly recorded on 27.1.2020 at 7.50 am from the driver of the vehicle transporting the goods ( filed as Ex.P-3), it is recorded that he is transporting the goods from Chegunta in Medak to Katedan, Hyderabad. 58. 'Noticing the conveyance at a wrong destination' without anything more cannot be said to be a contravention of the CGST Act/Telangana GST Act,2017 and it is not an taxable event, for there could be several reasons for the same including the driver losing his way or stopping for repair or to answer a call of nature. 59. Admittedly the vehicle at the time of its detention on 27.01.2020 at Katedhan at 07:50 a.m. by the 1st respondent was accompanied by tax invoice dt.26.1.2020 and e-Way Bill dt.26.01.2020 issued by M/s. Jeevaka Industries Private Limited, Chegunta Village and Mandal, Medak District, Telangana and IGST at the rate of 18% had already been charged thereon. 60. Once the conveyance/vehicle driver had the tax invoice and the e-way bill, there is prima facie compli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner was to unload the goods at Katedan, Hyderabad. According to him, there is a discrepancy of destination in the sense that the goods were being sent to a destination not mentioned in the invoice / e-Way Bill dt.26.01.2020. According to the 1st respondent, the e-Way Bill dt.27.01.2020 is issued subsequent to the detention of the vehicle and has to be therefore treated as a self-serving one and also as one created as an after-thought. 67. We are unable to accept the said contention. 68. It is not as if when goods are in transit there is a prohibition of their sale by the purchaser to a third party. In fact the court can take judicial notice that it is quite a common thing and a well recognized trade practice. 69. It is also important to note that 26.1.2020 i.e., the day when the goods were loaded on the vehicle was a Public Holiday, i.e., Republic Day. 70. If there is any transaction between the petitioner and M/s.Laxmi Narasimha Constructions, Proddatur, Andhra Pradesh on 27.01.2020, the next working day after 26.1.2020, there is no need to suspect the bona fides of transaction merely because the Ex.P9 - e- Way Bill was generated at 9.48 am, along with a tax invoice in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w-cause notice, the petitioner did not mention about collection of tax and penalty forcibly, and that that allegation is made for the first time only before this Court only as an after-thought. 78. At the time when the petitioner filed objections on 27.01.2020 through the driver of the vehicle to the show-cause notice issued by the 1st respondent on 27.01.2020, tax and penalty had not been paid by the petitioner at all. Therefore, there was no occasion for the petitioner to refer to the same in the reply to the show-cause notice. 79. Though the 1st respondent sought to distinguish the judgment of the Gujarat High Court in Synergy Fertichem (1 supra) on the ground that no action for confiscation of goods initiated in the instant case like in that case, we do not agree. In our opinion, the Gujarat High Court in Synergy Fertichem (1 supra) had not only interpreted Section 130 of the Act which dealt with confiscation of goods but also considered Section 129 of the Act, and the relevant provisions relating to detention of the goods. 80. In this view of the matter, the Writ Petition is allowed and the action of 1st respondent in collecting the sum of Rs. 4,30,778/- from petitioner on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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