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TMI Blog2023 (12) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... the supply is fructified. The provisions of law does not provide for any substitute to the prescribed delivery challan. The Circular dated 18.10.2017 issued by the Department of Revenue, Central Board of Excise and Customs also indicates that there is no substitute for the prescribed delivery challan. Therefore, non-possession of prescribed delivery challan at the time of seizure of the goods weakens the case of the petitioner. The record also reveals that after seizure of the goods, the owner of the goods appeared before STO seeking release of goods on the plea that the goods in question were for sale on approval basis and therefore accompanied by a delivery note along with a letter from the consignor certifying that the goods were for sale on approval basis but the said letter was misplaced by the courier agency. In the absence of valid delivery challan as prescribed under the rules, tax and penalty was imposed upon the petitioner under Section 129 of the Act. The record further reveals that the petitioner had voluntarily agreed in writing to pay tax and penalty as is also evident from the perusal of order passed by the STO. Payment of tax and penalty by the petitioner clearly i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondents, was not a valid document for movement of goods. Accordingly, the officer detained the said vehicle along with the goods loaded therein and issued order of detention under Section 129 (1) of the Act of 2017 and CGST Act read with Section 68 (3) of the Act of 2017 in Form GST Mov-06 and the same was served on the petitioner-owner of the firm who caused his appearance along with his counsel for release of goods on 03.01.2020. Subsequently, a notice was issued in GST Mov-07 to show cause as to why tax and penalty be not levied on the said goods in terms of Section 129 (1) of the GST Act, 2017. In response to the said notice, the petitioner expressed his consent to pay applicable tax and penalty whichever is applicable stating that the goods were meant for sale on approval basis for which delivery challan was issued by the supplier and the goods were accompanied by the letter from the consignor wherein it was written that the goods are on approval basis. However, the copy of the same was misplaced by the courier agency. 3. The STO has recorded a finding in the impugned order that when the goods were intercepted, the person in charge of the goods could produce only a deliv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d dated 31.08.2022, dismissed the appeal. The relevant extract of the impugned order is reproduced hereunder: In the instant case, there was no prescribed delivery challan accompanying the goods but instead a self invented delivery note accompanied the goods which is clear violation of the rule. Besides Circular No. 10/10/2017 GST nowhere provides any substitute for the prescribed delivery challan. For the reasons discussed in above paras I am of the considered view that the proper officer was justified in passing the impugned order which does not suffer from any legal infirmity. Accordingly, I find no merit in the appeal which is accordingly dismissed . The petitioner herein has assailed order supra in the instant writ petition. 7. Heard learned counsel for the parties and perused the impugned orders and the original record produced by the respondents. 8 At the outset, it would be appropriate to have a look at the relevant provisions of the Act of 2017. Section 129 of the Act which provides for procedure for detention, seizure and release of goods and conveyances in transmit reads thus: 129. Detention, seizure and release of goods and conveyances in transit. (1) Notwithstanding an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days may be reduced by the proper officer 9. From a perusal of subsection (1) of the aforesaid provisions, it is clear that where any person transports any goods or stores any goods while they are in transmit 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 conveyance shall be liable to detention or seizure and after detention or seizure, shall be released on payment of the applicable tax and penalty equal to one hundred per cent of the tax payable on such goods and in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty five thousand rupees, which ever is less, where the owner of the goods comes forward for payment of such tax and penalty. It is further provided that the goods shall be released on payment of applicable tax and penalty equal to the fifty per cent of the value of the goods reduced by the tax amount pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking a delivery of goods to the buyer and have an impact on the inventory levels since it decreases the inventory stock. 12. Rule 138 (A)(1) of the GST Act, 2017 provides that the person in charge of the 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-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device embedded to the conveyance in such manner as may be notified by the Commissioner 13. From the perusal of aforesaid provisions as well as the literal meaning of delivery note and delivery challan , we find that there is a lot of difference between delivery note and delivery challan. 14. From the perusal of the record, it is revealed that the only document the person in charge of the goods produced before the enforcement team at the time of interception, was delivery note which is neither a prescribed document nor a mandatory document. 15. Learned counsel for the petitioner Ms. Garima Gupta has submitted that the goods in question were supported with the letter from the consignor certifying the sale on approval basis but the same was not produced by the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for such supply can carry the invoice book with him so that he can issue the invoice once the supply is fructified. 19. The aforesaid provisions further clarified that all such supplies, where the supplier carries goods from one State to another and supplies them in a different State, will be inter-state supplies and attract integrated tax in terms of Section 5 of the Integrated Goods and Services Tax Act, 2017. It is also clarified that this clarification would be applicable to all goods supplied under similar situations. 20. From the perusal of aforesaid provisions, it is clear that the same does not provide for any substitute to the prescribed delivery challan. The Circular dated 18.10.2017 issued by the Department of Revenue, Central Board of Excise and Customs also indicates that there is no substitute for the prescribed delivery challan. Therefore, non-possession of prescribed delivery challan at the time of seizure of the goods weakens the case of the petitioner. 21. The record also reveals that after seizure of the goods, the owner of the goods appeared before STO seeking release of goods on the plea that the goods in question were for sale on approval basis and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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