M/s Ramesh Chand Kannu Mal Versus State Of Up And 2 Others
GST
2018 (5) TMI 761 – ALLAHABAD HIGH COURT – 2018 (14) G. S. T. L. 168 (All.)
ALLAHABAD HIGH COURT – HC
Dated:- 5-4-2018
WRIT TAX No. – 583 of 2018
GST
Hon'ble Krishna Murari and Hon'ble Ashok Kumar,JJ.
For the Petitioner :- Nishant Mishra
JUDGEMENT
(Per: Hon'ble Ashok Kumar, J.)
1. Heard Sri Nishant Mishra assisted by Sri Vipin Kushwaha, learned counsel for the petitioner and Sri C.B. Tripathi, learned Standing Counsel for the respondents-State.
2. With the consent of learned counsel for the parties, writ petition is finally disposed of without calling the counter affidavit.
3. The instant writ petition has been filed by the petitioner for the following relief;
A. Issue a writ, order or direction in the nature of certiorari quashing the impugned seizure order dated 28.03.2018 and consequential notice dated 28.03.2018. (Annexure-1 & 2) passed by respondent no.3
B. Issue a writ, order
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lue of the goods to the tune of Rs. 3,51,450/- on which Integrated Goods and Service Tax (hereinafter referred as 'the IGST') @ 18% has been charged to the tune of Rs. 63,262/-. Since the petitioner's firm is situated in District Faridabad, State of Haryana, it generated e-way bill prescribed under Central Goods and Service Tax, Rules (hereinafter referred as the 'CGST') after uploading of the relevant details of the aforesaid transactions. The said e-way bill has been downloaded from the official portal on 24.03.2018. The said e-way bill indicates the time and the date of generation as 24.03.2018 at 8.38 P.M. giving all requisite details therein. The said goods were booked for transportation from Faridabad to Haridwar through a transporter namely DEV Transporter, Muzaffar Nagar against goods receipt (GR) no. 241 dated 24.03.2018. The aforesaid goods are loaded at Faridabad and transported through truck no. U.P.-12AT-1460.
6. Learned counsel for the petitione
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er dated 28.03.2018 by which he has seized the goods as well as vehicle on the ground that the goods were being transported from outside the state of U.P. without the Transit Declaration Form, which is in violation of provision of UPGST Act. The respondent no.3, in pursuance to the seizure order, has issued a show cause notice dated 28.03.2018 under Section 129(3) of the UPGST Act directing the petitioner to appear before him on 04.04.2018 and to explain as to why tax @ 18% amounting to Rs. 63,262/- and equivalent amount of penalty may not be imposed.
9. Learned counsel for the petitioner has submitted that there is no requirement for generation or downloading of the Transit Declaration Form-I for the goods crossing/passing through the State of U.P. He has further submitted that since the TDF-I is not required under the law, the seizure of goods and the vehicle on the ground of non availability of TDF-I is wholly illegal and without jurisdiction.
10. It is further submitted that in e
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n Form TDF-02
11. Learned counsel for the petitioner has submitted that a process for initiation of a new indirect taxation regime was put into motion by the Constitution (101st Amendment) Act 2016 dated 8.9.2016 by which Articles 246-A, 269-A, 279-A and other provisions of the Constitution were amended. As per the amended Article 269-A, which pertains to levy and collection of Goods and Services Tax in the course of inter-state trade or commerce such tax shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Service Tax council. Import within the territory of India was included within the meaning of the term “Inter-State Trade or Commerce” and in respect of it tax, as aforesaid, would be levied and collected by the Government of India.
12. In pursuance to the aforesaid 101st Amendment of the Constitution three enac
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r the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorized to be the proper officers for the purposes of the said Act, subject to such exceptions and conditions as the Government shall, on the recommendations of the Council by notification, specify. Similarly for enforcement of CGST Act 2017 by virtue of section 6 thereof State Authorities under UPGST Act 2017 are also empowered to enforce CGST Act 2017.
15. It is also not in dispute that by virtue of section 20(xv) of the ''IGST Act, 2017' the provisions of ''CGST Act, 2017' apply in respect of matters covered by the IGST Act, 2017 on the subject of inspection, search, seizure and arrest. Chapter XIV of the CGST Act, 2017 deals with inspection, search, seizure and arrest. While section 67 of CGST Act, 2017 deals with the power of inspection, search and seizure, section 68 deals with inspection of goods in movement and it is this provision with which we are primarily
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ay be specified, are such, as may be prescribed. Now this prescription has been made under Rule 138 of the CGST Rules, 2017 which reads as under:
“138. E-way rule.-Till such time as an E-way bill system is developed and approved by the Council, the Government may, by notification, specify the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage.”
17. As would be evident from a reading of the aforesaid rule, it refers to an E-way bill System which is to be developed by the GST Council and it provides for an interim arrangement by the Government till an E-way Bill System is so developed and approved. The words “Government” used therein is defined in Section 2(53) of CGST Act, 2017 to mean the “Central Government”. It is not in dispute that on the date of interception of the vehicle in question E-way Bill System had not been developed, therefore, the documents which were required to be ca
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way Bill system was to come into force from 1.2.2018, but, the notification dated 29th December 2017 was rescinded by a subsequent notification dated 2.2.2018. Thereafter the notification dated 7th March 2018 has been issued regarding E-way Bill System.
18. Thus, E-way bill system has been prescribed only recently by a notification of the Government of India dated 7th March, 2018 whereby Rule 138 of the CGST Rules, 2017 has been amended and other Rules have been incorporated in this regard. These amendments are to come into force from a date to be specified by the Central Government which is specified w.e.f. 01.04.2018.
19. Be that as it may, the fact of the matter is that on the date of incident i.e. 24.03.2018 neither there was any E-way Bill System nor any notification by the Central Government under Rule 138 of the CGST Rules, 2017 requiring the carrying of a TDF Form or any other such document in the course of inter-State supply/movement of goods, as such, the very basis for pas
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' the Central Government'. Moreover, with respect to Goods and Service Tax in relation to inter-State Trade the Parliament alone has the authority to legislate as would be evident from the 101st Amendment to the Constitution.
21. In this view of the matter, we are of the considered view that on the relevant date i.e. 24.03.2018, there was no requirement of carrying TDF Form-1 in the case of an inter-State supply of goods. In fact on the relevant date there was no prescription of the documents to be carried in this regard under Rule 138 of the CGST Act, 2017, accordingly, the seizure and penalty imposed upon the petitioners based on the notification dated 21.7.2017 issued under Rule 138 of the UPGST Act 2017, which was not applicable, is clearly illegal.
22. Cross-empowerment under section 4 of IGST Act, 2017 and section 6 of CGST Act, 2017 merely means that State Authorities empowered under the UPGST Act, 2017 can also enforce the provisions of CGST Act, 2017 or IGST Act, 201
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ed by the State Government under Rule 138 of the Rules made under the UPGST Act 2017, was required to be carried, which is not the requirement in law. For this very reason, the judgment dated 29.1.2018 passed by a Coordinate Bench of this Court in Writ Tax No.95 of 2018 does not apply to the instant case, as the challenge therein was to the very power of the State Authorities under UPGST Act, 2017 to seize goods involved in inter-state supply. Here the question is whether petitioner was required to carry TDF Form I or not, which we have answered in the negative.
24. As regards the provisions of Section 129 UPGST Act, 2017 under which the impugned action has been taken, the same is not applicable to an inter-State trade or commerce. By virtue of Section 20 of the IGST Act, 2017, it is section 129 of CGST Act, 2017 that would apply, but this is not the ground on which we are invalidating the impugned action, as, if it is traceable to the aforesaid provision of CGST Act, 2017 which is pa
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ld take me through the provisions of the IGST Act, CGST Act and SGST Act and in particular, the provisions of Section 4 and Section 20 of the IGST Act and Section 6 of the CGST Act read with Rule 138 of the CGST Rules as amended by notification No.27/2017 – Central Tax for the purposes of pointing out that, although the power to prescribe the documents that are to accompany the transportation of goods in the course of interstate trade is conferred on the Central Government, the Central Government has, till date, not notified the documents that have to be carried by a transporter of the goods in the course of interstate movement. Under the said circumstances, and finding that neither the State Legislature nor the State Government would have the power to make laws/rules to govern interstate movement of goods in the course of trade, and for the purposes of levy of tax, I am of the view that detention in Ext.P.5, for the sole reason that the transportation was not accompanied by the prescr
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early inapplicable for the reasons already mentioned earlier. There was no intent to evade tax.
27. The contention of Sri Nishant Misra, learned counsel for the petitioners was that the transaction was one of inter-State supply of goods, therefore, it was covered by the Integrated Goods and Services Tax Act, 2017 and as per section 20 (xv) thereof, in matters of inspection, search, seizure and arrest, provisions of the Central Goods and Services Tax Act, 2017 were applicable. As per section 68 of the CGST Act, 2017, inter alia, Government 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. This prescription is contained in Rule 138 of the Central Goods and Services Tax Rules, 2017, but, no notification had been issued by the Central Government under the said rule specifying the documents that a person in charge of a conveyance carr
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t jurisdiction.
29. According to the counsel for the petitioner, the Commissioner of State Tax has no power to issue the circular in exercise of power under Section 168 of the Act. The Commissioner, therefore, cannot issue circular and directions which are not in consonance with the Act and Rule or the notifications. He has further submitted that the Commissioner is not expected to perform the legislature function and issue the instruction or the circular on something contrary to the provision which are available in the Act or Rule.
30. Learned counsel for the petitioner, therefore, has submitted that the Commissioner by way of circular dated 06.02.2018 usurped the rule making power of the legislature. It is further submitted that the circular issued by the Commissioner cannot revive the notification. In the present case the Notification no. 1014 dated 21.07.2017 which was already amended by another notification No. 1359 dated 20.09.2017 has no legal value. The counsel for the petiti
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requiring of downloading of TDF-I. He has also submitted that the order of seizure and issuance of the notice under Sections 129(1) and 129(3) respectively are issued with full authority of law by the respondent no.3 and are in accordance with law.
33. We find no substance in the submission of learned counsel for the State.
34. We noticed that the notification dated 21.07.2017 has already been amended by the notification No. 1359 dated 20.09.2017 and on account of aforesaid amendment, the UPGST (4th Amendment) Rules, 2017 was introduced and made effective with effect from 01.02.2018 vide notification No.138 dated 30.01.2018, therefore, in our opinion, the initial notification no.1014 by which e-way bill-01, e-way bill-02, e-way bill-03 and TDF (Transit Declaration Form) was introduced stands rescinded.
35. We are in agreement with the submission of learned counsel for the petitioner that with effect from 01.02.2018 there was no requirement to download the Transit Declaration
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