M/s Ramdev Trading Company And Another Versus State Of U.P. And 3 Others
GST
2017 (12) TMI 341 – ALLAHABAD HIGH COURT – [2018] 1 GSTL 12 (All), 2019 (22) G. S. T. L. 14 (All.)
ALLAHABAD HIGH COURT – HC
Dated:- 30-11-2017
Writ Tax No. 779 of 2017
GST
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 Rs. 9,54,325/-.
The petitioner claims to be a registere
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ced that the goods were being transported without Transit Declaration Form(hereinafter referred to as the 'TDF') required to be accompanied with such goods in accordance with the notification dated 21.07.2017 under Rule 138 of the U.P. GST, Rule 2017(hereinafter 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 po
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goods in question was of Refined Palm Oil and that both consignment of goods were being transported from Rajasthan to Assam and that no part of the consignment was meant for sale or consumption inside the State of U.P.
However, the respondent no.4 passed a penalty order 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 sei
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e and a penalty to be enforced against the assessee, the requirements of Section 129(1) of the Act have to be fulfilled.
Relying on the aforesaid provision it is submitted that the penalty under Section 129(3) of the Act is referable to a violation contemplated under Section 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
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f tax by making specific allegation in that regard at the time of seizure and necessarily in the show-cause notice issued in penalty proceedings and thereafter to lead evidence in support of such allegations.
In absence of such allegation and evidence, penalty did not become 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 thro
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of a learned Single Judge passed in M/s Murliwala Agrotech Ltd. Vs. Commissioner of Trade Tax, U.P. Lucknow reported in 2005 NTN (28) 198, wherein dealing with similar situation it has been observed as follows:-
“The objection of the check post officer that in the builty or 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 mention
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mention the correct name of the goods for the proper verification but this can not be a ground to raise any doubt that goods may not cross State of U.P. All the documents namely, challan, builty, and Form-32, which is a declaration form for import under the 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 Murliw
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the petitioner submits that a similar interpretation is required to be made under Section 129 of the Act in the context of the situation arising in the present case.
Opposing the aforesaid argument, learned counsel for the revenue Shri C.B. Tripathi 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 downlo
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evade tax.
Even in the penalty notice issued to the petitioner on 03.11.2017, there is no allegation made of their being any intention on part of the petitioner to evade tax. Thus, the petitioner was never put to notice/show-cause why penalty may not be 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 i
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