Navyug Airconditioning VS State Of Uttar Pradesh

In this case, the petitioner, represented by Sri Nishant Mishra, learned counsel, along with Sri Vipin Kumar Kushwaha, Advocate, has brought forth a grievance concerning the seizure of his goods. The seizure was executed through an impugned order dated March 25, 2018. This order was passed under Section 129(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 (U.P.G.S.T.). The U.P.G.S.T. Act, 2017, is a state legislation that aligns with the Central Goods and Services Tax Act, 2017, as part of India’s broader GST framework. Section 129(1) of this Act deals with the detention, seizure, and release of goods and conveyances in transit if there is a suspicion or evidence of non-compliance with GST provisions. The petitioner’s main contention revolves around the legality and appropriateness of the seizure of his goods under this specific section of the Act. He seeks relief from the court, challenging the validity of the seizure order and arguing that it was not justified under the circumstances. The petition likely includes arguments related to procedural irregularities, the nature of the goods in question, compliance with tax provisions, or other relevant factors that may impact the legitimacy of the seizure. The State of Uttar Pradesh, represented by Sri C.B. Tripathi, Special Counsel, is defending the actions taken by the authorities under the U.P.G.S.T. Act. The State is likely to argue that the seizure was in accordance with the law and that the petitioner failed to comply with the necessary GST regulations, warranting the seizure of the goods.

This case highlights the ongoing legal disputes arising from the implementation of the GST system in India, particularly regarding the interpretation and enforcement of the provisions related to the movement of goods across state lines and compliance with tax laws. The outcome of the case will depend on the court’s assessment of the facts, the applicability of the legal provisions, and the arguments presented by both sides. The case involves a petitioner who is challenging the seizure of his goods by the State of Uttar Pradesh under the U.P. Goods and Services Tax Act, 2017 (U.P.G.S.T.). The petitioner, represented by counsel Sri Nishant Mishra and assisted by Sri Vipin Kumar Kushwaha, argues that the seizure order dated March 25, 2018, is improper because the goods were in transit from outside the state. Therefore, the transaction should fall under the jurisdiction of the Integrated Goods and Services Tax Act, 2017 (I.G.S.T.), along with the Central Goods and Services Tax Act (Central G.S.T.), rather than the U.P.G.S.T.

The petitioner’s main argument is that the U.P.G.S.T., along with its rules and notifications, should not apply to goods in interstate transit, as these are governed by the I.G.S.T. and Central G.S.T. Sri C.B. Tripathi, representing the State of Uttar Pradesh, counters this by stating that the seizure was indeed made under Section 6 of the I.G.S.T., in conjunction with Section 129(1) of the Central G.S.T. He argues that even though there might have been an incorrect reference to the provision in the seizure order, this does not invalidate the order itself. The core issue revolves around the applicability of tax laws on goods in interstate transit and whether an incorrect citation of legal provisions can nullify an otherwise valid seizure. The petitioner seeks relief from the court, arguing that the wrong application of U.P.G.S.T. renders the seizure order invalid, while the State contends that the order is lawful under the correct provisions of I.G.S.T. and Central G.S.T., despite any technical errors in the documentation.

In this case, the petitioner, represented by learned counsel Sri Nishant Mishra and his team, is challenging the seizure of goods under an order dated March 25, 2018, issued under Section 129(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 (U.P.G.S.T.). The petitioner argues that the seized goods were in transit from outside the state, implying that the transaction should be governed by the Integrated Goods and Services Tax Act, 2017 (I.G.S.T.), in conjunction with the Central Goods and Services Tax Act (C.G.S.T.), rather than the U.P.G.S.T. The contention is that the U.P.G.S.T. and its associated rules or notifications should not apply to interstate transactions, which are under the purview of the I.G.S.T.

Sri C.B. Tripathi, representing the State of Uttar Pradesh, argues that the seizure order, though issued under the U.P.G.S.T., was effectively made under Section 6 of the I.G.S.T. read with Section 129(1) of the C.G.S.T. Act. Therefore, he contends that a mere incorrect citation of the legal provision on the seizure order does not invalidate the order itself.

The key issue revolves around the applicability of the U.P.G.S.T. to interstate transactions. U.P.G.S.T. is typically applicable to transactions within the state of Uttar Pradesh, while the I.G.S.T. governs interstate transactions. Section 20 of the I.G.S.T. Act makes the provisions of the C.G.S.T. Act applicable to matters such as inspection, search, and seizure under the I.G.S.T. Thus, the legal debate centers on whether the seizure was properly conducted under the relevant provisions of the I.G.S.T. and C.G.S.T. Acts, despite the incorrect citation of the U.P.G.S.T. on the order.

Rule 138 of the Rules under the Central Goods and Services Tax (C.G.S.T.) Act outlines the framework for the E-Way bill system. This rule provides that until an E-Way bill system is fully developed and approved by the GST Council, the government may, through notification, specify the documents that must accompany goods in transit.

In accordance with this provision, a notification was issued mandating the E-Way bill for goods in transit. However, this requirement only became enforceable from February 1, 2018, and was not applicable prior to this date. This E-Way bill system is a key component for tracking the movement of goods and ensuring compliance with GST regulations.

In parallel, the Uttar Pradesh Goods and Services Tax (U.P.G.S.T.) also incorporates similar provisions under Rule 138 of its own rules. By a notification dated July 21, 2017, the U.P.G.S.T. mandated the use of E-Way bills. However, this requirement is specifically applicable to goods in transit within the State of Uttar Pradesh. It does not extend to goods that are being transported from outside the state into Uttar Pradesh.

Thus, while both the Central and U.P. GST frameworks have established requirements for E-Way bills, their applications differ. The Central GST’s E-Way bill mandate became effective from February 1, 2018, and covers all interstate movements of goods, while the U.P.G.S.T. rule, effective from an earlier date, is limited to intrastate transactions within Uttar Pradesh. This distinction is critical in determining the applicability of E-Way bill requirements based on the geographical movement of goods.

Rule 138 of the Rules established under the Central Goods and Services Tax Act (C.G.S.T.) stipulates that, until the E-Way Bill system is fully developed and approved by the GST Council, the government may specify by notification the documents required to accompany consignments of goods. A notification issued under this rule mandates that an E-Way Bill must be carried with goods in transit. However, this requirement was enforced starting February 1, 2018, and was not applicable before this date.

Similarly, the Uttar Pradesh Goods and Services Tax Act (U.P.G.S.T.) includes analogous provisions. Under Rule 138 of the U.P.G.S.T. Rules, a notification dated July 21, 2017, mandates the use of E-Way Bills. However, this requirement applies only to goods in transit within the state of Uttar Pradesh and does not extend to goods transported from outside the state.

As such, even if the seizure of goods is considered to have been conducted under Section 129(1) of the Central Goods and Services Tax Act, the absence of a provision for the E-Way Bill under the Central G.S.T. on the relevant date suggests that the seizure may have been conducted improperly. This implies that, given the timeline and the legal requirements, the seizure could be deemed illegal if it was enforced before the E-Way Bill system was mandated by the Central G.S.T. Act.

Sri Tripathi is advised to seek instructions from his client and file a counter affidavit in response to the petition. He has been granted a period of three weeks to complete this task. This means that within the next three weeks, Sri Tripathi should gather the necessary information, prepare a detailed counter affidavit, and submit it to the court. The counter affidavit will likely address the petitioner’s claims, present the State’s perspective, and provide legal arguments or evidence to refute the petitioner’s objections regarding the seizure of goods.

Sri C.B. Tripathi, representing the State of Uttar Pradesh, has been directed to seek instructions and file a counter affidavit in response to the petition. He has been given a timeframe of three weeks to submit this counter affidavit.

Once the counter affidavit is filed, the case will be listed for further proceedings. Specifically, it will be scheduled for admission or final disposal alongside Writ Petition No. 87 of 2018. This means that after the counter affidavit is submitted, the court will review the case in conjunction with Writ Petition No. 87 of 2018 to determine the next steps or to make a final decision on the matter.

Sri C.B. Tripathi, representing the State of Uttar Pradesh, has been directed to seek further instructions and file a counter affidavit within three weeks. This counter affidavit is to be submitted in response to the petition challenging the seizure of goods.

During this interim period, the court has ordered that the seized goods and the vehicle be released to the petitioner. However, the release is contingent upon the petitioner providing an indemnity bond and security (excluding cash and bank guarantees). This security must cover the proposed tax and penalty based on the value of the goods as detailed in the documents accompanying them.

The case will be scheduled for admission or final disposal along with writ petition number 87 of 2018 after the counter affidavit has been filed.

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