Rateria Laminators Pvt. Ltd. vs Additional Commissioner Grade 2Court

Without recording the reasons for disbelief, the seizure memo needs to be quashed. Allahabad High Court in /s Rateria Laminators Pvt. Ltd. (16-Aug-2023) Facts of the case:14-Mar-2023: Vehicle intercepted. e-Way Bill was valid till 12-Mar-2023. A Tax and Penalty were levied. No other discrepancy has been found either in quality, quantity or goods as disclosed in the invoices, E-way bills or GR. The Petitioner pleaded that there was break down of the vehicle and the driver fell ill but no reason has been assigned by any of the authorities in the impugned orders for disbelieving the same. High Court held since the authorities below have not recorded any findings with regard to the submissions made by the petitioner, the impugned orders as well as seizure memo could not be sustained in the eye of law and quashed.

1. Heard Sri Suyash Agarwal, learned counsel for the petitioner and Sri Rishi Kumar, learned Additional Chief Standing Counsel. Present writ petition has been filed with the following prayers:

“A. Issue a writ order or direction in the nature of scertiorari quashing order dated 18.4.2023 passed by Additional Commissioner Grade-2 (Appeal)-II, Commercial Tax/State Tax, Kanpur, respondent no.2 u/s 107 of the UPGST Act 2017 (Annexure No.14).

B. Issue a writ order or direction in the nature of scertiorari quashing order dated 27.3.2023 passed by Assistant Commissioner , Mobile Squad, Bhognipur, Ramabai Nagar, Kanpur Dehat, U.P. Respondent no.2 u/s 129(3) of the UPGST Act 2017 (Annexure No.11).

C. Issue a writ order or direction in the nature of mandamus directing, respondent no.2, Assistant Commissioner , Mobile Squad, Bhognipur, Ramabai Nagar, Kanpur Dehat U.P. To release goods and vehicle seized vide seizure memo dated 23.3.2023 passed in GST MOV-06 forth with.

D. Issue a writ order or direction in the nature of prohibition restraining the respondent no.2 from emplying coercive measures to recovery penalty pursuant to order dated 27.3.2023 passed From GST MOV- 09.”

2. Since the GST Tribunal has not yet been formed the present writ petition is being entertained against the aforementioned impugned orders.

3. Brief facts of the case are that petitioner is a Company registered under the Companies Act, 1956 having its business at 1,132, Cotton Street, Burrabazar, Kolkatta West Bengal. The petitioner in its normal course of business made inward supply of B55HM0003NA G-LEX HDPE-2 HSN 3901.20.00 15 from GAIL, Auraiya U.P. The petitioner also made inward supply of similar item from GAIL Auraiya U.P. for which two invoices dated 6.3.2023 were prepared, copies of which have been annexed as Annexure 2 to the writ petition. For movement of goods from Auraiya Uttar Pradesh to Jalpaiguri, West Bengal two E-way Bills were generated having validity upto 12.3.2023, copies of which are annexed as Annexure 3 to the writ petition. A GR was also prepared on the same day i.e. 6.3.2023 in which invoice numbers and E-way bills have specifically been mentioned. It is stated that after completing the formalities goods were in transit from Auraiya U.P. to Jalpaiguri, W.B. and on way the Driver of the Vehicle No. UP-77-AN-6825 fell ill and there was also some break down of the vehicle, therefore onwards journey could not be continued to reach the destignation before 12.3.2023.

4. The Vehicle was inercepted by respondent no.2 on 13.3.2023 and Form GST MOV04 was prepared on 14.3.2023. Thereafter Form GST MOV01 was prepared on 23.3.2023 and consequently an order was passed on the same day that the goods in question are being carried without proper ducuments as E-way bills have expired. Thereafter on the same day From GST MOV 06 was prepared and subsequently respondent no.2 issued notice in From GST MOV 07 under section 129(3) of the UPGST Act (hereinafter referred to as the Act) proposing to impose penalty of Rs. 11,18,624/- under section 129(1)(a) of the Act and Rs. 36,66,606/- under section 129(1)(b) of the Act which has been annexed as Annexure 9 to the writ petition. An order under section 129 (3) of the Act was passed directing the petitioner to deposit Rs. 11,18,624/- for release of goods.

5. Being aggrieved with the said order the petioner preferred appeal before under section 20 of the Act before respondent no.1 which has been rejected vide order dated 18.4.2023. Hence the present writ petition.

6. Learned counsel for the petitioner submits that the petitioner is a registered dealer having GSTIN No. 19AABCR2147R1ZU and in its normal course of business made purchases from the said registered dealer (GAIL) which is Central Government undertaking for which two invoices were raised on 6.3.2023. Consequently for sending goods to its onward journey to West Bengal two E-way bills were generated on the same day but the goods could not reach its destination before expiry of the E-way bills which was valid upto 12.3.2023. The goods were intercepted by the respondent no.2 on 13.3.2023 and detained on the ground that E-way bills have expired. He further submits that on physical verification as well as from the perusal of the documents there was neither any discripency in the items so transited nor in the quality and quantity of the goods. He further submits that there was no intention of the petitioner to avoid payment of tax. He further submits that the goods have been detained on the technical fault as the E-way bills have expired.

7. He further submits that pursuant to the notice as to under what circumstances the vehicle could not reach its destination before expiry of E-way bills which was valid upto 12.3.2023, the petitionere submitted its reply explaining the reason that due to medical exigency the driver fell ill and due to some breack down in the vehicle the goods could not reach its destination before 12.3.2023. He further submits that since the driver of the vehicle was not aware of GST law, he could not apply for extension of the E-way bills before its expiry.

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