M/s Om Disposals, M/s Fenasia Ltd. Versus State of U.P. And 4 Others
GST
2018 (5) TMI 527 – ALLAHABAD HIGH COURT – 2018 (15) G. S. T. L. 561 (All.)
ALLAHABAD HIGH COURT – HC
Dated:- 30-4-2018
WRIT TAX No. – 41 of 2018, WRIT TAX No. – 645 of 2018
GST
Hon'ble Krishna Murari And Hon'ble Ashok Kumar, JJ.
For the Petitioner : Rahul Agarwal
For the Respondent : C.S.C.,A.S.G.I.,Krishna Agarawal,Manish Goyal
ORDER
By means of this petition filed under Article 226 of the Constitution of India petitioners have challenged the authority of the State of U.P. for issuing the notification dated 21.07.2017 whereby which E-way bill-01 has been prescribed for the purposes of import of goods for an amount over and above Rs. 50,000/- from outside the State of U.P. into the State of U.P. under the newly introduced provisions of Goods and Service Tax Laws. The aforesaid aforesaid requirement has been prescribed by the State under Rule 138 of the U.P. Goods and Service Tax R
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An order was placed by the petitioner to M/s JV Engineering Works, CB-103, Ring Road, Naraina, New Delhi for purchase of paper cup making machine. The said machine was to be dispatched by the seller situated at New Delhi to petitioner manufacturing unit situate at Bijnor (U.P.). The seller situated at New Delhi issued an advance receipt evidencing receipt of Rs. 7,08,000/- from the petitioner towards the supply of paper cup making machine. Due to some reason, delivery was delayed though advance payment has been made by the petitioner. After gap of certain period, dealer at Delhi has dispatched the machine without intimating the petitioner and has issued invoice no.014 dated 18.11.2017. The goods were being transported by Lorry receipt dated 18.11.2017 issued by one M/s Mithila Transport Service. The vehicle was intercepted by the Mobile Squad Officials and interception memo no.106 dated 19.11.2017 was issued under Section 129(1) of the U.P. SGST Act, 2017. The reason specified/mentione
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interception the goods were not accompanied with E-way bill-01.
Against the order dated 22.11.2017 appeal has been preferred by the petitioner before the Additional Commissioner, Grade-2 (Appeals)-1, State Taxes, Noida, which was dismissed by the appellate authority vide order dated 14.12.2017 mentioning therein the same reason as were mentioned by the Mobile Squad Authorities.
The contention of the petitioner is that the State authority has no jurisdiction to prescribe any documentation in respect of transaction which is covered under IGST Act. This issue has not been dealt with by the appellate authority. It is submitted by the petitioner that in view of the fact that the Tribunal contemplated under the GST Act has not yet been constituted and the fact that challenge is to a notification issued by the State of U.P., the petitioner has filed instant writ petition with a prayer that the notification dated 21.07.2017 which provides that E-way bill-01 for importing goods for more than
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ed counsel for the petitioner further submits that the notification dated 21.07.2017 issued in exercise of power under Rule 138 of the U.P. GST Rules can be apply to transaction and movement of the goods within the State as the U.P. GST Rules are only applicable to such movements of the goods. Inter-State transaction falls within the purview of IGST Act, and it is the Central Government alone which can specify the documents that are required to be carried by transporter or other person during inter-State movements of the goods. He further submits that the Central Government having not prescribed any documents in this regard, the petitioner was under no obligation to carry any documents apart from tax, invoice, challan, goods receipt etc along with consignment.
Lastly, the learned counsel for the petitioner submitted that the consignment, in question, could not be detained, seized and subjected to levy of penalty for not carrying any form/document which the State of U.P. has prescribed
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ra Goods Transport Corporation. In the said case 220 pieces of Chocholate Display Cooler of M/s Voltas Ltd. were being transported from Pant Nagar, State of Uttarakhand to Radiant Enterprises, Kolkata, West Bengal. The consignment was intercepted at Lucknow in State of U.P. on the ground that original TDF form was not available. Notice under Section 129(3) of U.P. GST Act, 2017 was issued and an order under clause (b) of Section 129(1) for payment of tax and penalty was passed by proper officer.
On a challenge being made the Division Bench held as under:
“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
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the I.G.S.T. Act 2017 applies, whereas, in matters of intra-State trade and commerce the ''C.G.S.T. Act 2017' and the State Goods and Services Tax Acts, which in this case is ''U.P.G.S.T. Act 2017', apply.
Section 3 of the I.G.S.T. Act 2017 provides that the Board may appoint such Central Tax Officers as it thinks fit for exercising powers under this Act. There is no dispute about the fact that by virtue of section 4 of the I.G.S.T. Act 2017 the officers appointed under 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 C.G.S.T. Act 2017 by virtue of section 6 thereof State Authorities under U.P.G.S.T. Act 2017 are also empowered to enforce C.G.S.T. Act 2017.
It is also not in dispute that by
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ction (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.”
As would be evident from its reading, the documents which the Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified, are such, as may be prescribed. Now this prescription has been made under Rule 138 of the C.G.S.T. 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.”
As would be evident from a
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movement as is referred in section 68 of the C.G.S.T. Act 2017 and Rule 138 of the C.G.S.T. Rules 2017. In fact, Dr. Deepti Tripathi, learned counsel for the Government of India made a categorical statement on the basis of instructions that T.D.F. Form was not required to be carried for movement of inter-State goods to which the I.G.S.T. Act 2017 applies. In fact, as per Dr. Deepti Tripathi, learned Advocate appearing for the Government of India, C.G.S.T. Rules 2017 were amended on 30th August 2017 and vide another notification dated 29.12.2017 this amendment containing the E-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.
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 C.G.S.T. Rules
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of inter-State movements of goods, but, in our view it is only the Government of India which is empowered to issue such a notification in respect of inter-State trade under section 20(xv) of the I.G.S.T. Act 2017 read with section 68 of the C.G.S.T. Act 2017 and Rule 138 of the C.G.S.T. Rules 2017 made thereunder, as, the term ''Government' used in Rule 138 is defined in section 2(53) of the C.G.S.T. Act 2017 to mean the ''Central Government', just as, under section 2(9) of the I.G.S.T. Act 2017 ''Government' means '' 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.
In this view of the matter we are of the considered view that on the relevant date i.e. 17.12.2017 there was no requirement of carrying T.D.F. Form-1 in the case of an inter-State supply of goods. In fa
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ich only the Central Government has the power under section 20(xv) of I.G.S.T. Act 2017 read with section 68 of C.G.S.T. Act 2017 and Rule 138 of C.G.S.T. Rules 2017.
The fact that the authorities under the State Act were empowered to exercise the powers under the C.G.S.T. Act 2017, assuming it to be so, is inconsequential, as, it is not their jurisdiction to exercise power of seizure which is under question, but, the manner in which they have exercised it on the basis of an inapplicable provision of law, as, they have proceeded on the presumption that T.D.F. Form-1 prescribed under a notification issued by the State Government under Rule 138 of the Rules made under the U.P.G.S.T. 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 U
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Rules.”
The contention of the petitioner that the appellant authority has recorded its reasons that the E-way bill having been downloaded after the interception of the consignment (even though produced along with the reply to the show cause notice) and should therefore be disregarded, runs contrary to several decisions of this Hon'ble Court in which it has specifically opined that the purpose of issuing show cause notice is to provide an opportunity to a dealer to remove the defects and explain its conduct, in case document furnished along with the reply to the show cause notice were not given due credence or not taken into account, the purpose of issuance of show cause notice stand defeated. For this purpose, the petitioner relies upon the judgment of this Court in Ganpati Udyog Vs. C.C.T. 2012 NTN (vol. 49) 142 and Balaji Timber Paints Vs. C.C.T. 2010 NTN (vol. 43) 53 and P.S. Sales Pvt. Ltd. Vs. C.C.T. 2015 NTN (vol. 58) 379.
It is further submitted that under Section 129(1) o
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ansit has already been upheld. Shri Tripathi further submits that the judgment of the Lucknow Bench dated 13.04.2018 in Satyendra Goods Transport Corporation (supra) has not considered the judgment dated 24.08.2017 delivered in PIL No. 38246 of 2017 U.P. Kar Adhivakta Sangathan (supra).
Rebutting the aforesaid submissions of the Standing Counsel, Shri Agarwal submits that the judgment dated 24.08.2017 passed in U.P. Kar Adhivakta Sangathan (supra) has itself failed to notice that the relevant legal provisions particularly the definition of the government under Section 2(53) of the CGST Act and Section 2(9) of the IGST Act. The judgment in U.P. Kar Adhivakta Sangathan (supra) seems to have been delivered in the context of the provisions of the U.P. GST Act and not in the context of the IGST Act or the CGST Act and the transaction covered there-under. Learned counsel for the petitioner submits that the judgment dated 24.08.2017 in U.P. Kar Adhivakta Sangathan (supra), when read in conte
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oods Transport Corporation (supra).
However, the judgment dated 24.08.2017 passed in U.P. Kar Adhivakta Sangathan (supra) referred to by Sri A.C. Tripathi, learned Standing Counsel does not refer to these provisions but upholds the power of the State of U.P. in issuing the notification dated 21.07.2018. The relevant findings/conclusions of the judgment dated 24.08.2017 read as under:
” The petitioner is not challenging the validity of any provision of U.P. Goods and Services Tax Act, 2017 (hereinafter referred to as 'the Act') or the Rules framed thereunder, namely, Section 165 of the Act or Rule 138 of the Rules.
The submission of Sri N.C. Gupta, learned counsel for the petitioner is that in view of Article 279A added to the Constitution of India, a council has been constituted and therefore, until and unless the council recommends the documents and the format of the various forms, the State Government has no authority or jurisdiction in law to prescribe the documents to
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To ascertain the real controversy before the Division Bench in Kar Adhivakta Sangathan (supra), we directed that the records of Public Interest Litigation No. 38246 of 2017 be placed before us. We have perused the memo of public interest petition and examined the grounds of challenge made to the authority of the State of U.P. to issue notification we find that the submissions now being raised to challenge the authority of the State of U.P. in issuing the notification dated 21.07.2017, were not even raised before the Bench deciding U.P. Kar Adhivakta Sangathan (supra). The submissions now being urged by Mr. Agarwal were never brought to the notice of the Division Bench; the Division Bench had no opportunity to peruse the relevant statutory provisions and adjudicate upon the legality of the notification issued by the State of U.P. in that light.
At the same time, the judgment in U.P. Kar Adhivakta Sangathan (supra) has not been considered and discussed by the Lucknow Bench, may be for
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ions, the other judgment seems to have overlooked the earlier judgment which may, otherwise, have constituted binding precedent. In such situation, it may be said that the doctrine of per incuriam applies to both judgments, though in different contexts.
In our considered opinion, in such a situation, it would not be appropriate for us to comment on the correctness of either of the two judgments delivered by co-ordinate Benches of this Court or embark on a third independent course of our own. Judicial propriety requires us to refer the matter to a larger Bench for an affirmative pronouncement on the validity of the notification dated 21.07.2017 and the Circulars issued there-under (as modified from time to time) in so far as it pertains to the requirement of form E-way bill-01 to be carried for import of consignment valued not more than Rs. 50,000/- in a case of inter-State transaction and the legality of seizure/penalty proceedings undertaken by the authorities of the State of U.P. fo
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, having not noticed the earlier Division Bench judgment in U.P. Kar Adhivakta Sangathan (supra), can be said to have correctly nullified the impact of the notification dated 21.07.2017 issued by the State of U.P. on the ground that State of U.P. could not have prescribed any E-way bill or TDF in respect of an inter-State transaction under the Goods and Services Tax regime?
(c) Whether the State Government is empowered under Rule 138 of U.P. GST Rules to issue a notification prescribing carrying of any forms or documents along with a consignment during inter-State movement?
During the course of hearing, it was pointed out by learned counsel for the petitioner that the goods and the vehicle are both lying seized since they were first detained by Mobil Squad Officials. In the interest of justice, we provide that the goods and the vehicle shall stand released forthwith upon the petitioner furnishing an indemnity bond for the value of the tax and penalty levied by the authorities as con
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