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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 ..... de thereunder and as per para 5 of the circular dt.14.9.2018 referred to above, it did not warrant initiating of proceedings under Sdc.129 of the Telangana GST Act, 2017. 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. - 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. 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 favour of purchaser, viz., M/s.Laxmi Narasimha Constructions, Proddatur, about two hours after the vehicle s detention at 7.50 am and cannot be construed that petitioner had an intention to unload the goods at Katedan, Hyderabad, which is somehow contrary to law. Any defect, if any, in the documentation accompanying the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 customer s premises also at Proddatur. 7. According to petitioner, the buyer requested the petitioner to deliver the goods directly to their shop work site, i.e., M/s. JVS Switchgear LLP at Katedan/Mailardevpally, Rajendranagar, Ranga Reddy District in the State of Telangana for converting into Electric Tower parts. 8. The petitioner alleges that in order to save transport expenditure and time in getting the goods transported to (i) the petitioner s premises at Proddatur, Andhra Pradesh and (ii) later on to the buyer s premises also at Proddatur, Andhra Pradesh, and (iii) again transporting them to the Job work site in Telangana State, at the request of M/s.Laxmi Narasimha Constructions, Proddatur, the petitioner telephonically instructed the driver of vehicle to take the goods to M/s JVS Switchgear LLP at Katedan/ Mailardevpally, Rajendranagar, T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 customer s / buyer s place in Andhra Pradesh, and (iii) thereafter, again to the job work site of petitioner s customer located in Telangana State, it had asked the driver of the vehicle to deliver goods directly to the petitioner s customer s Job work site office at Katedan, Telangana State by raising appropriate tax invoice and also generating e -Way Bill. According to petitioner, by this action, no tax benefit accrued to petitioner and there is no loss of revenue to the State of Telangana either. 18. Reliance is also placed on a Circular issued by the Central Board of Indirect Taxes and Customs vide CBEC / 20 / 16 / 03 / 2017 and GST dt.14.09.2018 and it is pointed out that by virtue of the said Circular, which is binding on the respondents, if a consignment of goods is accompanied with an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted 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 it was waiting for unloading the above goods at M/s. JVS Switchgear LLP at Katedan, Hyderabad. He also alleged that the statement of the driver was recorded in Telugu language on 27.01.2020, and that it was also read over to the driver in Hindi language and he signed the statement in Hindi with his own handwriting. 28. It was also alleged that subsequently, the statement of the driver was also endorsed by the authorized person of M/s. JVS Switchgear LLP at Katedan, Hyderabad, viz., Mr. Raghu Prakash. 29. It was also alleged that the detention order dt.27.01.2020 in Form GST MOV 06 was served on the driver of the vehicle in exercise of the power under Section 129(1) of the SGST Act / CGST Act read wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, Telangana nothing prevented the petitioner to mention the name and address of the Job work place at Katedan of M/s. JVS Switchgear LLP at Mailardevpally, Rajendranagar, Ranga Reddy District, as consignee in the invoice issued by him, and the petitioner cannot canvass the case of purchaser from it regarding saving of transport cost for the purchaser. The consideration by this Court : 41. The counsel for petitioner, and the learned Government Pleader for Commercial Taxes, reiterated their respective contentions. 42. S.107 provides an appellate remedy only against a decision/order of an adjudicatory authority. 43. It is not the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner 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 determined under subsection (2)without giving the person concerned an opportunity of being heard. (5)On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (2) shall be deemed to be concluded. (6)Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within seven days of such detention or seizure, further proceedings shall be initiated in terms of section 130: Provided that where the detained or seized goods are perishable or h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 contravention of the provisions of the CGST Act or the rules made thereunder. It has been informed that proceedings under section 129 of the CGST Act are being initiated for every mistake in the documents mentioned in para 3 above. It is clarified that in case a consignment of goods is accompanied by an invoice or any other specified document and not an e-way bill, proceedings under section 129 of the CGST Act may be initiated. 5. Further, in case a consignment of goods is accompanied with an invoice or any other specified do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond 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 take the view that in all cases, without any application of mind and without any justifiable grounds or reasons to believe, the authorities may not be justified to straightway issue a notice of confiscation under Section 130 of the Act. For the purpose of issuing a notice of confiscation under Section 130 of the Act at the threshold, i.e., at the stage of Section 129 of the Act itself, the case has to be of such a nature that on the face of the entire transaction, the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onveyance 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 compliance with the provisions of the CGST Act and Telanaga GST Act and the rules made thereunder and as per para 5 of the circular dt.14.9.2018 referred to above, it did not warrant initiating of proceedings under Sdc.129 of the Telangana GST Act,2017. 61. It is the case of the petitioner that the goods had been sold during transit by petitioner to M/s.Laxmi Narasimha Constructions, Proddatur, Andhra Pradesh, and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 favour of purchaser, viz., M/s.Laxmi Narasimha Constructions, Proddatur, about two hours after the vehicle s detention at 7.50 am and cannot be construed that petitioner had an intention to unload the goods at Katedan, Hyderabad, which is somehow contrary to law. 71. If the intention of the petitioner to unload the goods at Katedan, Hyderabad is pursuant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 4,30,778/- from petitioner on 30.01.2020 is declared as arbitrary and violative of Articles 14 and 265 of the Constitution of India, and also the provisions of CGST Act, 2017 and TGST Act, 2017, and also the Circular CBEC / 20 / 16 / 03 / 2017 GST dt.14.09.2018, issued by the Government of India; and consequently, the respondents a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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