Case tittle | Ayann Traders VS State of U.P |
court | Allahabad high court |
Honourable judge | Justice Rohit Ranjan Agarwal,J. |
Citation | 2023 (02) GSTPanacea 298 HC Allahabad WRIT TAX No. 1319 Of 2018 |
Judgment date | 27-February-2023 |
This writ petition involves a challenge to an order dated 15.05.2018 passed by the Additional Commissioner, Grade-II (Appeal)-05, Commercial Tax, Kanpur under Section 129(3) of the U.P. Goods and Service Tax Act, 2017 (referred to as “Act of 2017”). The proceedings concern a registered dealer (referred to as the petitioner) who sold 300 bags of Pan Masala valued at Rs.33,81,000/- to a dealer in Meghalaya. A tax invoice was generated on 08.04.2018 under the Integrated Goods and Service Tax Act, 2017 (referred to as “IGST Act”), charging 28% IGST and 60% Cess on the transaction.
The petitioner asserts that the goods were handed over to the transporter, M/s Bombay Kandla Transport Pvt. Ltd., for transportation to Meghalaya via Truck No.NL01N/6504, and an E-Way bill was generated on the same day. The transporter also issued a ‘bility’ for transporting the goods to Meghalaya. However, it’s contended that the vehicle NL01N/6504 was allegedly used for transporting fruits and vegetables to West Bengal by Bombay Kolkata Logistics through a different ‘bility’ (No. 382/08-04-2018) on the same day.
The petitioner’s grievance lies in the subsequent detention of the goods by the authorities in Uttar Pradesh, claiming that the goods were not in transit to Meghalaya but were diverted en route to West Bengal. Consequently, the authorities imposed a penalty under Section 129(3) of the Act of 2017.
In response, the petitioner contends that the diversion to West Bengal was done without their knowledge or consent and that they had complied with all legal requirements by generating the E-Way bill and providing necessary documentation to the transporter. The petitioner argues that they cannot be held responsible for any unauthorized diversion by the transporter.
During the hearing, Sri Rahul Agarwal and Sri Varun Srivastava appeared as learned counsel for the petitioner, while Sri A.C. Tripathi represented the State as the learned Standing Counsel. The arguments revolved around the legality of the detention and penalty imposed by the authorities, with the petitioner seeking relief from the court.
The court is tasked with determining whether the petitioner acted in accordance with the provisions of the Act of 2017 and whether they can be held liable for the alleged diversion of goods. The case raises important questions regarding the responsibility of registered dealers in ensuring the proper transportation of goods and the liabilities arising from any unauthorized diversions during transit.
The outcome of this writ petition will not only affect the petitioner’s rights and liabilities but also set a precedent for similar cases involving the transportation of goods under the GST regime. It underscores the complexities and challenges faced by businesses in navigating the regulatory framework governing interstate trade and transportation under the GST laws.
the petitioner, represented by Sri Rahul Agarwal and Sri Varun Srivastava, sought relief from an order dated 15.05.2018 issued by the Additional Commissioner, Grade-II (Appeal)-05, Commercial Tax, Kanpur. This order was made under Section 129(3) of the U.P. Goods and Service Tax Act, 2017 (“Act of 2017”). The petitioner, a registered dealer, sold 300 bags of Pan Masala to a dealer in Meghalaya for Rs. 33,81,000/-. The transaction was taxed at 28% IGST and 60% Cess, with a tax invoice generated on 08.04.2018 under the Integrated Goods and Service Tax Act, 2017 (“IGST Act”).
The petitioner claimed that the goods were handed over to the transporter, M/s Bombay Kandla Transport Pvt. Ltd., on 08.04.2018 for transportation to Meghalaya via Truck No.NL01N/6504. An E-Way bill was generated the same day, and a bility for transporting the goods to Meghalaya was also issued. However, it was discovered that the same vehicle had been used for transporting fruits and vegetables to West Bengal on 07.04.2018 and rice to Darbhanga (Bihar) on 12.04.2018. The vehicle returned to Delhi on 11.04.2018 and 17.04.2018. On 18.04.2018, the goods were intercepted by the Mobile Squad at Kanpur at 3:42 P.M., despite the presence of the tax invoice and bility. Subsequently, a seizure order was issued on 01.05.2018, imposing a penalty of Rs. 63,56,280/-, including tax and cess.
The petitioner contended that the taxing authorities erred in their decision, as all necessary documents were provided for transportation. They argued that the E-Way Bill was valid since its generation on 08.04.2018, despite the vehicle’s prior use. The petitioner challenged the Appellate Authority’s finding that the E-Way Bill should have been cancelled when the goods were not dispatched on the same day, citing Rule 139(9). They maintained that since the vehicle was made available on 17.04.2018, the goods were loaded and dispatched on the intervening night of 17/18.04.2018.
This case revolves around a writ petition filed challenging an order dated 15.05.2018 by the Additional Commissioner, Grade-II (Appeal)-05, Commercial Tax, Kanpur under Section 129(3) of the U.P. Goods and Service Tax Act, 2017. The petitioner, a registered dealer, sold 300 bags of Pan Masala to a dealer in Meghalaya, issuing a tax invoice under the Integrated Goods and Service Tax Act, 2017, charging 28% IGST and 60% Cess. The goods were handed over to a transporter for delivery.
The petitioner asserts that the goods were loaded onto a truck with E-Way bill generated on 08.04.2018. However, the vehicle had been previously used for transporting fruits and vegetables to West Bengal and rice to Darbhanga, Bihar, before being made available for transporting the Pan Masala. The goods were intercepted on 18.04.2018 by the Mobile Squad in Kanpur, leading to seizure and imposition of penalties.
The petitioner argues that all necessary documents were in order and that there was no tax evasion, as the E-Way bill was generated within the stipulated time and the vehicle was legitimately made available for transport. They contest the authority’s decision to impose penalties.
The State’s counsel counters that the E-Way bill should have been canceled if the goods were not transported as per its details, as per Rule 138(9) of the Central Goods and Service Tax Rules, 2017. They highlight discrepancies in the transport history of the vehicle and argue that the petitioner had engaged in multiple transactions during the period in question, using the same vehicle and documents.
The State contends that the purchasing dealer has not come forward, raising doubts about the legitimacy of the transaction. They emphasize the vehicle’s movements through various toll plazas and assert that the petitioner should have canceled the E-Way bill if the vehicle was not made available by the transporter.
Both parties present their arguments, focusing on the compliance with E-Way bill regulations and the legitimacy of the transaction. The case raises questions about the responsibility of dealers in ensuring compliance with transport regulations and the consequences of discrepancies in documentation.
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