Ramesh Chand Kannu Mal VS State of Uttar Pradesh

The court heard Sri Nishant Mishra, assisted by Sri Vipin Kushwaha, learned counsel for the petitioner, and Sri C.B. Tripathi, learned Standing Counsel for the respondents-State. With the consent of learned counsel for the parties, the writ petition was finally disposed of without calling for a counter affidavit. The writ petition was filed by the petitioner seeking the quashing of the impugned seizure order and consequential notice dated 28.03.2018, passed by respondent no.3, and a direction to release Vehicle No. UP-12AT-1460 without insisting on the deposit of any amount of tax or penalty. The petitioner also sought a declaration that Notification No.1014 dated 21.07.2017, as amended, is directory and not mandatory, in so far as it requires carrying a Transit Declaration Form (TDF) for inter-State transactions covered by the IGST Act, 2017, and the quashing of a circular dated 06.02.2018 issued by Respondent no.2. The petitioner, a firm dealing with all kinds of Iron Scrap and registered under the GST Act, 2017, sold M.S. Scrap via Invoice dated 24.03.2018 for an amount of Rs.4,14,712 to M/s Cosmox Ferrours (P) Ltd., Bhagwanpur, District Hardwar, Uttrakhand, and prepared a tax invoice against the aforesaid sales being Tax Invoice No.0257 dated 24.03.2018 indicating the relevant details

The writ petition was filed by the petitioner, represented by Sri Nishant Mishra and assisted by Sri Vipin Kushwaha, against the State, represented by Sri C.B. Tripathi. The petitioner sought various reliefs, including quashing the seizure order and notice issued on 28.03.2018, releasing Vehicle No. UP-12AT-1460 without requiring any tax or penalty payment, and declaring a certain notification as directory rather than mandatory regarding the requirement of carrying a Transit Declaration Form (TDF) for interstate transactions covered by the IGST Act, 2017. The petitioner, a firm dealing in iron scrap and registered under the GST Act, 2017, sold M.S. Scrap to a company in Uttarakhand and generated an e-way bill as required under the CGST Rules. However, when the goods were being transported from Faridabad to Haridwar, the vehicle was intercepted and detained by the Assistant Commissioner, State/Commercial Tax, Mobile Squad-VIIth Unit, Ghaziabad, on 25.03.2018. Upon receiving information about the detention, the petitioner downloaded the Transit Declaration Form and presented it to the authorities, although the petitioner’s counsel argued that it was not legally required. Despite this, the respondent passed a seizure order on 28.03.2018, seizing both the goods and the vehicle. The court, with the consent of the parties, decided to dispose of the writ petition without requiring a counter-affidavit.

The petitioner’s firm, engaged in the business of iron scrap and registered under the GST Act, 2017, sold M.S. scrap to a company in Haridwar, Uttarakhand, generating a tax invoice and an e-way bill on March 24, 2018. The goods, transported from Faridabad, Haryana to Haridwar through a transporter, were intercepted and detained by the Assistant Commissioner, State/Commercial Tax, Mobile Squad, Ghaziabad on March 25, 2018, for not carrying a Transit Declaration Form (TDF) despite the petitioner’s immediate download and presentation of the TDF upon learning of the detention. The petitioner argues that the TDF was not legally required for goods passing through Uttar Pradesh, making the seizure of the goods and the vehicle, as well as the subsequent show-cause notice issued under Section 129(3) of the UPGST Act, illegal and beyond the respondent’s jurisdiction. The petitioner seeks the quashing of the seizure order and the notice, the release of the detained vehicle without payment of tax or penalty, and a declaration that the notification requiring the TDF is directory, not mandatory. The court heard the arguments and disposed of the writ petition without calling for a counter affidavit, considering the consent of both parties.

The writ petition, filed by the petitioner represented by Sri Nishant Mishra and Sri Vipin Kushwaha, challenges the seizure order and notice dated 28.03.2018 by respondent no.3, and requests the release of the vehicle without the deposit of tax or penalty. The petitioner, a firm dealing in Iron Scrap and registered under the GST Act, sold M.S. Scrap for Rs.4,14,712/- to a company in Uttarakhand, generating an e-way bill on 24.03.2018 for transportation via DEV Transporter. The vehicle was detained on 25.03.2018 in Ghaziabad by the Assistant Commissioner, who insisted on a Transit Declaration Form (TDF). Although the petitioner downloaded and presented the TDF later that day, the respondent issued a seizure order, claiming the absence of the TDF violated the UPGST Act. The petitioner argues that TDF-I was not legally required for goods passing through Uttar Pradesh and contends that the seizure and the notice under Section 129(3) of the UPGST Act are illegal and beyond jurisdiction, citing constitutional amendments that govern the levy and collection of GST for inter-state trade or commerce by the Government of India.

The petitioner, represented by Sri Nishant Mishra and assisted by Sri Vipin Kushwaha, sought relief through a writ petition filed before the court, challenging the seizure order dated 28.03.2018 and a consequential notice issued by the authorities. The petitioner requested the court to quash the impugned seizure order and notice, to mandate the release of the seized vehicle without the deposit of any tax or penalty, to declare that the requirement for carrying a Transit Declaration Form (TDF) under Notification No.1014 dated 21.07.2017, as amended, was directory and not mandatory, and to quash the circular dated 06.02.2018 issued by the respondents. The petitioner, a firm dealing in iron scrap and registered under the GST Act, 2017, had sold M.S. Scrap via a tax invoice dated 24.03.2018 and generated an e-way bill as required under the Central Goods and Service Tax Rules for the transportation of goods from Faridabad, Haryana, to Haridwar, Uttarakhand. The vehicle carrying the goods was intercepted and detained in Ghaziabad by the Assistant Commissioner, State/Commercial Tax, Mobile Squad-VIIth Unit, on 25.03.2018, due to the alleged absence of the required TDF. Despite the petitioner downloading and presenting the TDF on the same day, the respondent passed a seizure order on 28.03.2018, seizing the goods and the vehicle for non-compliance with the UPGST Act. The respondent also issued a show cause notice under Section 129(3) of the UPGST Act, proposing the imposition of tax and an equivalent penalty. The petitioner argued that the TDF was not required by law for goods merely passing through the State of U.P. and that the seizure and penalty were illegal and beyond the respondent’s jurisdiction. The petitioner’s counsel further elaborated on the constitutional background leading to the new indirect taxation regime established by the Constitution (101st Amendment) Act, 2016, and the subsequent enactments of the IGST Act, 2017, the CGST Act, 2017, and the UPGST Act, 2017, emphasizing that the IGST Act governs inter-state trade and commerce, while the CGST and UPGST Acts govern intra-state trade and commerce, and the officers appointed under these Acts are empowered to act under the respective laws.

The writ petition was heard with counsel from both sides and decided without needing a counter affidavit. The petitioner sought to quash the seizure order and the consequential notice both dated 28.03.2018, which had been issued by the respondent. The petitioner also requested a direction for the release of the vehicle without requiring a tax or penalty deposit and sought a declaration that a specific notification dated 21.07.2017, as amended, is merely directory and not mandatory regarding the requirement to carry a Transit Declaration Form (TDF) for inter-State transactions under the IGST Act, 2017. Additionally, the petitioner requested the quashing of a circular dated 06.02.2018. The petitioner is a firm engaged in the trade of iron scrap, registered under the GST Act, 2017, and sold M.S. Scrap through an invoice dated 24.03.2018 for Rs.4,14,712 to a buyer in Uttrakhand. The petitioner generated a tax invoice and an e-way bill as required under the CGST Rules, and the goods were transported by a truck to Haridwar. However, the vehicle was intercepted by a state tax officer in Ghaziabad on 25.03.2018, and the petitioner promptly downloaded and furnished the TDF on the same day. Despite presenting the TDF, the vehicle and goods were seized on the ground that they were being transported without the TDF, in violation of the UPGST Act, leading to a show cause notice under Section 129(3) of the UPGST Act for tax and penalty imposition. The petitioner argued that the TDF was not required under the law, making the seizure illegal and beyond the jurisdiction of the respondent. The petitioner also referenced the Constitution (101st Amendment) Act 2016, which introduced the new indirect tax regime, and pointed out the various GST enactments, including the IGST Act 2017, CGST Act 2017, and UPGST Act 2017, asserting that the IGST Act applies to inter-State trade while the CGST and UPGST Acts apply to intra-State trade. The petitioner noted that state authorities are empowered to enforce the CGST Act, and that provisions under the CGST Act related to inspection, search, seizure, and arrest apply to matters under the IGST Act. The petitioner highlighted that Section 68 of the CGST Act deals with the inspection of goods in movement, and the documents required under this section are prescribed under Rule 138 of the CGST Rules, which refers to the E-way bill system. The petitioner emphasized that the rule specifies the documents that must be carried during the movement of goods until the E-way bill system is fully developed and approved.

The court heard arguments from Sri Nishant Mishra, supported by Sri Vipin Kushwaha, representing the petitioner, and Sri C.B. Tripathi, the learned Standing Counsel for the respondents-State. With mutual consent, the writ petition was disposed of without requiring a counter affidavit. The petitioner sought various reliefs, including the quashing of a seizure order and related notice dated March 28, 2018, and the release of the vehicle involved without the need for tax or penalty deposit. The petitioner is a firm dealing in iron scrap, registered under the GST Act, 2017. The firm sold M.S. scrap for Rs. 4,14,712 to a buyer in Uttarakhand and generated a tax invoice for Rs. 3,51,450 with an IGST of 18%, amounting to Rs. 63,262. An e-way bill was generated and downloaded on March 24, 2018. The goods were transported from Faridabad to Haridwar via a truck, and while crossing Ghaziabad on March 25, 2018, the vehicle was detained by the Assistant Commissioner, State/Commercial Tax, Mobile Squad, Ghaziabad. Upon learning of the detention, the petitioner promptly downloaded the Transit Declaration Form (TDF) on the same day and presented it to the authorities. The counsel argued that the TDF was not legally required and that the seizure of the goods and vehicle was illegal and without jurisdiction. The case delved into the legal framework established by the Constitution (101st Amendment) Act, 2016, which led to the enactment of the IGST Act, 2017, the CGST Act, 2017, and the UPGST Act, 2017. The IGST Act applies to inter-State trade, while the CGST and UPGST Acts apply to intra-State trade. Section 68 of the CGST Act deals with the inspection of goods in movement, requiring certain documents during transportation, which were prescribed under Rule 138 of the CGST Rules, 2017. However, at the time of the incident, the E-way Bill System was not yet developed, and no specific documents were notified by the government. The counsel for the Government of India confirmed that the TDF was not required for inter-State goods movement under the IGST Act. Although the E-way Bill System was later prescribed by a notification on March 7, 2018, and was to come into force from April 1, 2018, it was not applicable on the date of the incident. The court recognized that no E-way Bill System was in place on March 24, 2018, the date of the alleged violation.

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