2017 (12) TMI 341 – ALLAHABAD HIGH COURT – [2018] 1 GSTL 12 (All) – Detention of goods – absence of Transit Declaration Form (TDF) – mis-description of goods – Refined Palm Oil – penalty – Section 129(1) of UP GST Act – Held that: – at the stage of seizure the detaining authority had not applied his mind, nor formed any opinion as to intention to evade tax. The only allegation made in the seizure order is to the effect that the TDF is absent and that the goods have been mis-described. There is no allegation whatsoever as to the intention of the petitioner to evade tax.
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In absence of any allegation or evasion of tax being made against the petitioner at the stage of detention and seizure and even at the stage of issuance of notice of penalty, it is difficult to sustain the penalty.
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As to absence of TDF, though it amounted to a breach of the Rules, yet, in the entirety of the facts & circumstances of this case, as admitted to the revenue, it does appear that goods were being
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– Hon'ble Bharati Sapru And Hon'ble Saumitra Dayal Singh, JJ. For the Petitioner : Shubham Agrawal For the Respondent : C.S.C.,A.S.G.I. ORDER Heard Shri Shubham Agrawal, learned counsel for the petitioner and Shri C.B. Tripathi , learned Standing Counsel for the department. This writ petition has been filed by the consignor of the goods to challenge the order dated 03.11.2017 passed by the respondent no.4, Assistant Commissioner, U.P. Goods & Services Tax, Mobile Squad-II, Gorakhpur, under Section 129(1) of the U.P. GST Act(hereinafter referred to as the 'Act) and the order dated 08.11.2017 passed under Section 129(3) of the Act imposing penalty of ₹ 9,54,325/-. The petitioner claims to be a registered dealer at Rajasthan who sold 130 bags of sweet supari valuing at ₹ 66,17,500 to M/s S.G. Enterprises at Assam against Tax Invoice No.52. In that invoice the petitioner has disclosed to have charged IGST @ 18 per cent. By another Tax Invoice No.51, the petition
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einafter referred to as the 'Rules'). It also appears that the detaining authority was not satisfied as to the identity of the goods being same as that mentioned in the tax invoice with respect to the Palm Oil. According to the detaining authority, the goods were 'Ujala Shudh Deshi Ghee'. The petitioner on it's part stated that due to inadvertent mistake on part of the truck driver, transit declaration form had not been downloaded and therefore, it was not found accompanying the goods. However, it is the case of the petitioner that undisputedly the goods have originated from State of Rajasthan and were being transported to Assam through the State of U.P. At the time of detention they were near their exit point in the State of U.P., for onward journey to Assam. There is also no dispute as to the identity of the other consignment of 'sweet supari'. Then on 03.11.2017, the seizure orders appears to have been passed, which records two reasons. First, seizure has
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rder on 08.11.2017 wherein the reason given for imposition of penalty are the absence of TDF as also the different identity of the goods namely 'Ujala Shudh Deshi Ghee' having been found in place of Refined Palm Oil. It has also been mentioned for the first time that the assessee had intention to evade payment of tax with the object of selling the goods inside the State of U.P. At the outset, Shri C.B. Tripathi, learned counsel for the revenue has raised a preliminary objection as to the maintainability of the writ petition in view of alternative remedy being available to the petitioner against the penalty order. Responding to the above, Shri Shubham Agrawal learned counsel for the petitioner submits that the seizure and penalty orders are wholly without jurisdiction and therefore, the bar of alternative remedy may not apply. Also, he submits that no appellate authority has yet been constituted under the Act. Therefore, the remedy of appeal is not available to the petitioner. I
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ion 129(1) of the Act. For the purpose of Section 129(1) of the Act, it is not only necessary for the revenue to establish that there is a technical violation of the Act and/or the Rules framed thereunder but that such a violation has a revenue impact inasmuch as the revenue is burdened to specifically allege and establish that the alleged violation of the Act and/or the Rules, as may be alleged, has been caused by the assessee with intention to evade payment of tax. It is thus submitted that in the instant case the first real allegation that arises is the absence of TDF. However, in view of the fact that full details of the transactions and place of its origin and also its destination were found mentioned in the tax invoice and other documents found accompanying the goods, in the first instance there was prima facie evidence in support of the claim raised by the petitioner that the goods were passing through the State of U.P and were not meant to be unloaded, consumed or sold inside t
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imposable merely because the TDF was not found accompanying the goods. Though all other documents were found accompanying to support the contention of the assessee that the goods were merely passing through the State of U.P. Then, as to the difference in the identity of the goods namely Refined Palm Oil as alleged by the revenue, learned counsel for the petitioner submits that in the first place there is no difference as alleged inasmuch as on the packing a different description has been mentioned but the real identity of the goods is as described in the tax invoice i.e. Refined Palm Oil. Then, it is submitted that difference in the quantity or quality or description of the goods that are admittedly passing through the State of U.P. is of no consequence to the State revenue authorities inasmuch as such a difference has no revenue impact. Once it is admitted or established on record that the goods were only passing through State of U.P., the role of the U.P. authorities was minimal and
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in the invoice it was not mentioned that the goods would be transferred in another vehicle and no explanation in this regard has been given is irrelevant. What had been happened prior to the arrival of the vehicle at the entry check post is wholly irrelevant. The objection of the check post officer that a different goods were found than the goods mentioned in the challan is also baseless. Perusal of the challan shows that the goods mentioned is cereal Based Blanded Food (Sattu). Show cause notice says that on verification it was found that in the packing, constituents of the goods mentioned are wheat, sugar, rice, soyabeen, vitamin and mineral. Therefore, in my opinion, there was no difference in the goods mentioned in the invoice and the goods mentioned in the packing. The items mentioned in packing are the constituent of the Cereal Based Blanded Food for which invoice was issued. The word "Sattu" is mentioned in bracket. It is seen that one particular item is called by dif
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he Uttaranchal Trade Tax Act shows that movement of goods started from Rajasthan and was going to Uttaranchal and was not intended for import inside the State of U.P. The provision of section 28-A of the Act is not applicable. The inference of an intent to evade tax is based on suspicion and merely on surmises and conjectures and on irrelevant consideration. Therefore, the check post officer has erred in refusing to issue transit pass and seizing the goods and the Tribunal has erred in confirming the seizure of the goods." Reliance has also been placed on another judgment of a learned Single Judge passed in S.G. Express Vs. Commissioner of Trade Tax, U.P. reported in [2011] 37 VST 35(All) wherein following the judgment of M/s Murliwala Agrotech Limited (supra), the learned Single Judge held as follows:- "In M/s Murliwala Agrotech Ltd. Vs. Commissioner of Trade Tax, U.P. Lucknow 2005 NTN (28) 198 it has been held by this Court that the goods being transported through U.P. cann
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submits that under Section 129(1) of the Act, the goods are exposed to seizure and penalty the moment there is a violation of the Act or the Rules. In so far as it is not disputed that the transaction involved transit of goods through the State of U.P. the goods should have been accompanied with TDF, over and above the Tax Invoice and other documents of transportation of goods. The contravention was thus complete and no further fact or intention was required to be established by the revenue to either seize the goods or impose the penalty. In this regard, Shri C.B. Tripahti, learned counsel for the revenue submits that the TDF was never produced by the petitioner up to the stage of imposition of penalty, as it first appears to have downloaded on 15.11.2017 i.e. one week after the penalty order. As to the merits of the penalty order which also bearing the preliminary objection raised by Shri C.B. Tripathi, learned Standing Counsel as to the existence of alternative remedy, he submits th
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imposed on account of his intention to evade tax. The only allegation up to the stage of issuance of the penalty show-cause notice, therefore, appears to be that the petitioner had contravened the provisions of the Act and therefore exposed itself to the penalty. However, in the penalty order, almost in the passing the respondent no.4 has recorded that the petitioner had intention to evade tax by unloading the goods inside the State of U.P. However, as a fact petitioner has not been found to have unloaded the goods. Also, neither such allegation was made against the petitioner at any prior stage nor the petitioner was called upon to furnish any reply nor there is any evidence in this regard. The observation made in the penalty order is, therefore, only an afterthought. The same cannot be relied upon by the State to justify the imposition of penalty. In absence of any allegation or evasion of tax being made against the petitioner at the stage of detention and seizure and even at the st
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