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TMI Blog2020 (11) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 129, it does not follow that in all cases where Section 130 of the GST Act is invoked, they have to be preceded by a detention of the goods/vehicle while in transit. As already noted, the proceedings under Section 130 can be invoked independent of any detention, and under the circumstances enumerated in the said Section, with the only rider that a precondition for the invocation of the provision is that there has to be material to suggest that the actions/omissions of the person were with an intention to evade payment of tax. In the instant case, while the material collected by the respondents, no doubt justify the detention of the goods and the vehicle, inasmuch as there was evidence to suggest that the transportation did not originate from Tamil Nadu, as was declared in the invoice/e-way bill that accompanied the transportation of the goods, and therefore, the said documents could be seen as invalid documents for the purposes of transportation of the goods, the respondents have not been able to establish an intention to evade tax which is a necessary pre- condition for invoking the provisions of Section 130 of the GST Act. In other words, while in the instant cases, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehended at a place that was not on the normal route between Kanyakumari and Maharashtra. 3. It would appear that the respondents passed an order for physical verification in FORM GST MOV-2, and immediately on receipt of the same, the petitioner in W.P(C).No.21907/2020 approached this Court challenging the detention of the goods and the vehicle. While the learned Government Pleader took time to get instructions in the matter, a statement was also recorded from the owner of the goods as also the driver of the vehicle, and copies of the said statements were made available before this Court. The respondents had also, in the meanwhile, collected material in the form of information from the Tax authorities in Kanyakumari and the Motor Vehicle authorities in Kerala to suggest that the consignment in question did not originate from Kanyakumari. Based on the information available with them, that suggested that the goods had actually been loaded in the vehicle only from Nellikuzhi in Kerala, the respondents invoked the provisions of Section 130 of the GST Act, to issue a notice in FORM GST MOV-10 to the petitioners. 4. While the petitioners submitted their reply to the said notice and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith its front facing the opposite side of Munnar route. A sketch of this area with directions and names of places is produced herewith and marked as Exhibit.R3(a). 4. The 3rd respondent was during the time, on surveillance duty. As part of regular checking, the vehicle was intercepted and documents were asked for. The driver who was then present in the vehicle, Mr.Faizal stated that the vehicle was coming from Kothamangalam and loaded with goods to Maharashtra. On verification of the documents, it was found that the accompanying E-way bill showed a transportation from Kanyakumari, Tamil Nadu to Kalyan West, Maharashtra. When confronted with the invoice and e-way bill, the driver stated that he had travelled from Kanyakumari to Ernakulam and then to Kothamangalam, where he had his place of residence and he was then proceeding from his house to Maharashtra, through Perumbavoor. At that time, the 3rd respondent asked him to show the toll pass that was taken at Aroor, if he had travelled from Ernakulam to Kothamangalam. Then the driver stated he was feeling unwell and he required sometime for taking rest. The 3rd respondent immediately thereafter intimated his superior offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner appeared and his statement was recorded. In the said statement, the petitioner deposed that he was working as a technician in a computer shop at Thripunithura for a monthly salary of ₹ 4,000/-. A person by name Manoj, whom he met by chance, had informed him of a business opportunity, which would reap substantial profits. It was told by Manoj that for the purpose of this business, the petitioner's documents and ID proofs were required. The details sought for were handed over to Manoj. Thereafter, Manoj informed him that a GST Registration was taken in the name of the petitioner in the State of Tamil Nadu. The petitioner further stated that he had not affixed his signature on any document for the purpose of securing a GST registration. On the specific aspect of the consignment, he stated that he had not spent even a single rupee on it. He had no idea about the details of the transaction, as to where it came from or the cost of it or to where it was despatched. The petitioner also stated that the subsequent to the interception, he was called to the office of a lawyer and he has no further knowledge about the case. A true copy of the statement of the petitioner da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tamil Nadu and brought the goods through the State of Kerala to the State of Maharashtra. Here the goods were never loaded from Tamil Nadu, and therefore no tax is paid to the State of Tamil Nadu. The owner of the consignment, that is, the petitioner herein has no information or knowledge with regard to the transportation. The fact that he himself is not a 'manufacturer' of Plywood is relevant here. In the registration details of the petitioner, the nature of his business activity is taken as one for wholesale business of Plywood, that is, it is only for trading of the commodity. A dealer who is also a manufacturer will be allotted the GST registration by recording his activity as a 'manufacturer'. If the dealer is not a manufacturer, he can transport goods only after procuring goods from a manufacturer or a third person. The petitioner could also not produce the purchase bills of Plywood in the present case. Thus, the whole sequence of events in the instant case points out to a sham transaction, with an intention to evade payment of tax to the State of Kerala. 14. By using dummy registration in the State of Tamil Nadu and raising an E-way bill therefrom, the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions as also on going through the averments in the writ petitions as also the counter affidavit filed on behalf of the official respondents, it is quite apparent that the respondents have misunderstood the scope and ambit of Sections 129 and 130 of the GST Act. It is now settled through a catena of decisions of this Court as well as the other High Courts that Sections 129 and 130 are independent provisions, and that, while a detention of goods and vehicle under Section 129 could entail proceedings under Section 130, in situations where the detained goods/vehicle are not cleared by the owners thereof within a period of 14 days from the date of passing of the order under Section 129, it does not follow that in all cases where Section 130 of the GST Act is invoked, they have to be preceded by a detention of the goods/vehicle while in transit. As already noted, the proceedings under Section 130 can be invoked independent of any detention, and under the circumstances enumerated in the said Section, with the only rider that a precondition for the invocation of the provision is that there has to be material to suggest that the actions/omissions of the person were with an intention t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have been an order confirming the proposed confiscation in terms of Section 130 of the GST Act. 9. Before parting with these cases, I must observe that, while it may be true that the invocation of Section 130 of the GST Act in these cases was not justified, the irregularity in the documents that accompanied the transportation surely make it out to be a case that justified a detention of the goods under Section 129 of the GST Act. In proceedings under Section 129 of the GST Act, there is no requirement for establishing mens rea, and hence, merely on detecting an irregularity in the documents that are to accompany the transportation of goods, the respondents would be justified in detaining the goods and passing the necessary order under Section 129(3) of the GST Act. No doubt, in the instant cases, since the owner of the goods had approached this Court at the GST MOV-2 stage, the respondents did not get an opportunity to pass any order under Section 129(3), more so because, they had, in the intervening period, initiated proceedings under Section 130 of the GST Act. The proceedings under Section 130 having been found to be misconceived, I am of the view that the respondents mu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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