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TMI Blog2020 (11) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be defective' and that the goods were being transported from Salem in the State of Tamil Nadu to Distillery Road, Secunderabad, but the vehicle was checked at IDA Jeedimetla, Hyderabad. It is alleged that there is a 'mismatch between the goods in movement and the documents tendered' i.e., that the goods were checked at IDA Jeedimetla; and so the petitioner has to pay tax and penalty as per the provisions of the Act. 5. On receipt of information of detention of the vehicle from the driver of the vehicle, the petitioner replied vide Ex. P4 dt. 23-01-2020 that the material from M/s. SAIL at Salem in Tamilnadu is purchased by various dealers at Hyderabad for delivery at various destinations in Hyderabad; that the vehicles come to Hyderabad in groups through Outer Ring Road and all the trucks assemble at IDA Jeedimetla; and that from that place, the person in charge from M/s. SAIL i.e. vendor, directs them to their destinations. It was contended that the goods vehicle carrying material of petitioner on its way to its destination was stopped at IDA Jeedimetla and the driver of the vehicle was waiting for the person in-charge from M/s. SAIL; and at that time, the vehicl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the petitioner, on flimsy grounds such as checking of the vehicle carrying goods at IDA Jeedimetla when goods are to be delivered at Secunderabad, tax and penalty cannot be levied. It is also contended that payment was made under pressure/coercion since the delivery schedule would be disturbed. 14. According to the petitioner, Section 129 of the Act applies only to cases where it is established that there was intention or in any case possibility of evasion of tax in respect of goods transported; even if some documents such as e-way bill is missing at the time of verification, it would at the most only create a rebuttable presumption that there was intention to evade payment of tax; and if the agent is able to establish that there was no intention evade payment of tax, then Section 129 of the Act would not be attracted. 15. Petitioner alleges that truck was in transit to its destination carrying all the required documents such as tax invoice and e-way bill and 1st respondent could not establish any intention on the part of the petitioner to evade payment of tax. The stand of the 1st respondent 16. Counter-affidavit was filed by 1st respondent refuting the above contentions. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nderabad only; that the driver in fact showed the address in the invoice to the respondents to inform them about the delivery of goods at Secunderabad; and the driver did not understand Hindi language used by the 1st respondent and was forced to sign the statement Ex. P5 in Form MOV-1. 25. It was also denied that the driver did not submit any document such invoice/e-way bill in support of the movement of the goods and that 1st respondent's assumption that the goods were destined to point at Jeedimetla cannot be accepted. 26. It is further alleged that there was no occasion for the driver to ask the way to weigh bridge as all the vehicles carrying material from SAIL which are to be delivered at various destinations in Hyderabad/Secunderabad come in groups and stop at Jeedimetla and from there the person in charge from SAIL directs them to their destination. 27. It is contended that the vehicle was checked and detained in spite of the driver carrying the invoice and e-way bill for the goods to be delivered at Secunderabad and the 1st respondent has forcefully taken the signature of the driver on the statement Ex. P5 in Form GST MOV-1 without properly explaining the contents th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and Circulars issued by the Central Board of indirect Taxes and Customs. 40. It is important to keep in mind that CGST Act, 2017/Telangana GST Act, 2017 are very recent laws and the common businessman is admittedly having difficulty to understand these enactments and the procedures they have introduced. 41. Also interpretation of taxing statutes should be done in a way to facilitate business and inter-State trading, and not in a perverse manner which would result in impediment of the same by harassing business persons. 42. Section 129 of the Act states: "129. Detention, seizure and release of goods and conveyances in transit:- (1) Notwithstanding anything contained in this Act, where any person transports any goods or stores while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyances shall be liable to detention or seizure and after detention or seizure, shall be released: (a) on payment of the applicable tax and penalty equal to one hundred per cent of the tax payable on such goods and, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying any consignment of goods of value exceeding a prescribed limit to carry certain documents and devices. 45. Rule 138-A of the Rules framed under the CGST Act mandates that a person in-charge of conveyance should carry invoice or bill of supply or delivery challan, and a copy of the e-Way Bill in physical form. 46. Rule 138-B permits the Commissioner or an Officer empowered by him to intercept any conveyance to verify the e-Way Bill in physical or electronic form for all inter-State and intra-State movement of goods, and Rule 138-C provides for inspection and verification of goods. 47. Under Section 168 of the Act, the Central Board of Indirect Taxes and Customs had issued a Circular No. 41/15/2018-GST-CBEC 2016/03/2017-GST dt. 13-04-2018 laying down the procedure for inspection of conveyance for inspection of goods in movement and detention, release and confiscation of goods and conveyance and ha issued certain instructions: " ... (b) The proper officer, empowered to intercept and inspect a conveyance, may intercept any conveyance for verification of documents and/or inspection of goods. On being intercepted, the person in charge of the conveyance shall produce the documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.09.2018, in regard to the procedure to be followed in the Interception of conveyances for inspection of goods in movement and detention, release and confiscation of such goods and conveyances'. 95. Our attention is drawn to paragraphs 3, 4, 5 and 6 of the said Circular, extracted below:- ".... 3. Section 68 of the CGST Act read with rule 138A of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as 'the CGST Rules') requires that the person in charge of 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 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'the questions to be determined in these cases relate to the release of consignment and the quantum of penalty, if any, to be levied at this stage, and pending adjudication." 49. Interpreting the above provisions, the Gujarat High Court in Synergy Fertichem Pvt. Ltd. (supra) held as under: "96. As far as the determination of penalty is concerned, it is the Assessing Officer/State Tax Officer who is the competent and proper person for such determination/quantification. However, a holistic reading of the statutory provisions 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l violations/transgressions with the same brush and makes a distinction between serious and substantive violations and those that are minor/procedural in nature; and 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 not with the necessary intent to evade payment of tax. We respectfully follow the same. 51. Therefore, we shall consider firstly the nature of the contravention of the provisions of the Act or the Rules allegedly made by the petitioner. 52. We are of the view that any defect, if any, in the documentation accompanying the goods for purpose of levy of tax and penalty has to be looked at also in terms of the Circular dt. 13.4.2018 and Circular dt. 14.09.2018 issued by the Central Board of Indirect Taxes and Customs, New Delhi. 53. In the instant case, one of the grounds for detention in Form GST MOV-06 is that 'the documents which were tendered are found to be defective'. 54. But (i) which document is defective (whether it is e-way bill or the tax invoice/bill and supply/delivery challan) and (ii) why it is defective, is not mentioned. 55. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not the case of the 1st respondent that at the time of it's detention or check at that location, there was sale of goods being done without paying applicable tax. 63. In fact there is no material placed on record by 1st respondent to show that any attempt was being made by petitioner to sell the goods in local market at IDA Jeedimetla on 22.1.2020 evading CGST and SGST. 64. We are of the opinion that the reasons given for detaining the goods and the vehicle they were being carried in do not indicate any violation of the provisions of the Act by petitioner warranting levy of tax and penalty on the petitioner under the Act. 65. In Dabur India Ltd. Vs. State of Uttar Pradesh (1990) 4 SCC 113 the Supreme Court observed that a litigant cannot be coerced by the Government to make payment of duties which the litigant is contending not to be leviable. The Supreme Court held that though the State is entitled to enforce payment and to take all legal steps, it cannot be permitted to play dirty games with the citizens to coerce them in making payments when the citizens were not obliged to make them. It also observed that if any money is due to the Government, it should not take extra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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