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TMI Blog2023 (7) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... pay installments. (ii) The petitioner contests imposition of penalty in lieu of confiscation of the vehicle, under Section 130 (2), third proviso of the Act. (iii) The vehicle was engaged by one M/s Om International Company, whose office was at Nagloi, West Delhi; the goods were being transported from Ballabhgarh, Punjab to Lakheempur, U.P.; [a sale invoice No. 150 dated 14.01.2023 to one M/s Adi Shakti Traders Nagasan Road, Lakeempur, U.P. was issued.] (iv) On 15.01.2023 at 10:39 P.M., at Kashipur-Rudrapur Highway, the Mobile Squad Authority intercepted the vehicle. The statement of the petitioner, who was the driver also, was recorded. The petitioner disclosed his address and mobile number along with the documents relating to the goods in transport i.e. the sale invoice. (v) The mobile squad made physical verification of the goods and documents and they did not find any discrepancy in the goods and the vehicle. The goods were found as per the sale invoice. (vi) Subsequent to it, on 19.01.2023, a show cause notice was issued to the petitioner as to why a fine of Rs. 10,98,000/- be not imposed on him and the vehicle be not confiscated for transporting the goods with i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discrepancies are highlighted as under:- (a) The supplier from involved in the supply of the goods being transported was found to be dubious firm as one more supply of the same supplier was also intercepted by the mobile squad on 09.09.2022 and proceedings under section 130 of the GST Act has also be initiated against the supplier and the supplier firm respondent no. 3 herein M/s Om International Company has also challenged the order passed under section 130 of GST Act before this Hon'ble Court by way of filing writ petition bearing No. 2383 of 2022 (M/S). It is also submitted here that the current status of the M/s Om International Company (Supplier herein) is that the GST Registration of Supplier stand cancelled from 10.02.2023. (b) That the goods being carried by the vehicle No. UK06-CA8300 was TMT Bar and which is an evasion prone commodity and was being supplied by a dubious firm as mentioned herein above. Moreover, the concerned vehicle was found to be operating on a different route and place (the place of supply mentioned invoice was from West Delhi to Lakhimpur whereas the vehicle was intercepted at Jagatpur Toll Plaza, Jaspur, Udham Singh Nagar. (c) That the perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax. It is argued that in the instant case, there is no evidence to suggest that the petitioner, in any manner, intended to evade the payment of tax. 8. In support of his contention, learned Senior Counsel for the petitioner has placed reliance on the principle of law as laid down in the case of Synergy Fertichem Pvt. Ltd. v. State of Gujarat, 2019 SCC OnLine Guj 6127. 9. In the case of Synergy Fertichem (supra), the Hon'ble Gujarat High Court discussed the law on the point and in para 144, 149 and 183 observed as hereunder:- "144. Confiscation proceeding is a quasi-judicial proceeding and not a criminal proceeding. Ordinarily, proof beyond reasonable doubt and proof of mens rea are foreign to the scope of the confiscation proceeding. However, the language of the statute should be read closely. Sometimes, the language of the statute may indicate the need to establish the element of mens rea. It is true that mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. However, applying the dictum of the Supreme Court as laid in Tamil Nadu Housing Board (supra), the provisions of Section 130 of the Act is made more stringent by use of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able in accordance with law. However, the element of mens rea cannot be read into Section 130 of the Act. (iii) For the purpose of issuing a notice of confiscation under Section 130 of the Act at the threshold, i.e., at the stage of detention and seizure of the goods and conveyance, the case has to be of such a nature that on the face of the entire transaction, the authority concerned should be convinced that the contravention was with a definite intent to evade payment of tax. The action, in such circumstances, should be in good faith and not be a mere pretence. In other words, the authorities need to make out a very strong case. Mere suspicion may not be sufficient to invoke Section 130 of the Act straightway. (iv) If the authorities are of the view that the case is one of invoking Section 130 of the Act at the very threshold, then they need to record their reasons for such belief in writing, and such reasons recorded in writing should, thereafter, be looked into by the superior authority so that the superior authority can take an appropriate decision whether the case is one of straightway invoking Section 130 of the Act. (v) Even if the goods or the conveyance is release ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed. (2) The details of documents required to be carried under sub-section (1) shall be validated in such manner as may be prescribed. (3) Where any conveyance referred to in sub-section (1) is intercepted by the proper officer at any place, he may require the person in charge of the said conveyance to produce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods." 13. Section 122 (1)(xiv) of the Act is as hereunder:- "122. Penalty for certain offences. - (1) Where a taxable person who - ..................................................................... ..................................................................... (xiv) transports any taxable goods without the cover of documents as may be specified in this behalf:" shall be liable to a penalty which may extend to twenty-five thousand rupees." 14. Section 130 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch possession. (7) The proper officer may, after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government." 15. Section 164 of the Act reads as follows:- "164. Power of Government to make rules. (1) The Government may, on the recommendations of the Council, by notification, make rules for carrying out the provisions of this Act. ..................................................................... ...................................................................... (4) Any rules made under sub-section (1) or sub-section (2) may provide that a contravention thereof shall be liable to a penalty not exceeding ten thousand rupees." 16. Rule 138A of the Rules reads as follows:- "138A. Documents and devices to be carried by a person-in-charge of a conveyance. (1) The person in charge of a conveyance shall carry- (a) the invoice or bill of supply or delivery challan, as the case may be; and (b) a copy of the e-w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent and acts in different sphere. It relates to confiscation. 22. It is the case of the respondents that the petitioner was not carrying e-way bill, which means that the proceeding of confiscation has been initiated under Section 130 (1) (iv) of the Act. 23. It has been argued on behalf of the petitioner that, in fact, the provisions of Section 130 of the Act would not come into operation merely because the incharge of the conveyance is not carrying documents. What is argued is that "intention to evade tax" has to be established. In this aspect, learned counsel has placed reliance in the case of Synergy Fertichem (supra). In the case of Synergy Fertichem (supra), the Hon'ble Gujarat High Court discussed the law on the point quite extensively and in para 144, as quoted hereinabove, observed "When the law requires intention to evade payment of duty, then it is not mere failure to pay duty. It must be something more. This something more should not be construed as obligatory on the part of the Revenue to establish or prove the necessary mens rea for the purpose of confiscation and penalty". 24. This aspect of intention to evade tax has also been considered by the Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated by the owner of the goods, who transports such goods, it is the transporter, who has to generate e-way bill. In the instant case, it has not been done. 28. The main argument on behalf of the petitioner is that it is not a case of evasion of tax; it is merely failure to carry the e-way bill, which is requirement of the Rules and as such is punishable under Section 164(4) of the Act or under Section 122(1)(xiv) of the Act. 29. Penalty under Sections 164(4) and 122(1)(xiv) of the Act may not come in way of the competent officer to proceed under Section 130 of the Act, if other circumstances permit to take action under Section 130 of the Act. 30. It is also argued on behalf of the petitioner that merely because transporter does not carry e-way bill, it does not per se makes the vehicle liable for confiscation. This is true. In order to confiscate a vehicle or to pass an order under Section 130 of the Act, what is to be shown is that there was an "intent to evade payment of tax". Intention is a mental condition. The mind cannot be read, but the action may attribute as to what the intention could be. 31. In the instant case, the following is admitted:- (i) On 15.01.2023, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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