Sterile India Pvt. Ltd. VS Union of India

In the present writ petition, the petitioner has challenged two specific orders. The first order, dated June 19, 2018, was issued by the Proper Officer-cum-Excise and Taxation Officer, Rohtak, referred to as the Proper Officer. The second order, dated March 12, 2020, was issued by the Appellate Authority, which upheld the initial order by the Proper Officer. These orders are documented in Annexures P-13 and P-18, respectively.

The petitioner identifies as a manufacturer of pharmaceuticals and is registered as an assessee under the Goods & Service Tax (GST) Tariff-Goods. The issue arose when goods belonging to the petitioner were intercepted while being transported in a vehicle with registration number HR-61C-7811 by the Proper Officer. The petitioner disputes the actions and decisions of the authorities regarding this interception and the subsequent orders affirming the actions taken against them.

By filing this writ petition, the petitioner seeks judicial intervention to overturn the orders from June 19, 2018, and March 12, 2020, contending that these decisions were incorrect and unjust. The petition calls into question the legality and appropriateness of the actions taken by the Proper Officer and the Appellate Authority, and seeks relief from the court to invalidate the contested orders.

By way of the present writ petition, the petitioner has challenged the order dated 19.06.2018 passed by the Proper Officer-cum-Excise and Taxation Officer, Rohtak (hereafter ‘Proper Officer’) and the subsequent order dated 12.03.2020 passed by the Appellate Authority, which affirmed the Proper Officer’s decision.

The petitioner is engaged in the manufacturing of pharmaceuticals and is an assessee under the Goods & Service Tax (GST) regime. The incident in question involves the apprehension of the petitioner’s goods while they were in transit in Vehicle No. HR-61C-7811 by the Proper Officer. The goods were found in the vehicle as described. However, a discrepancy was noticed in all six E-way Bills where the transporter’s name was mentioned as M/s Patel Integrated Logistics Limited (Division PAF) with GSTIN-29AAACP6445K1Z1. Consequently, the Proper Officer issued Form GST MOV-2 under Section 68(3) of the CGST/HGST Act, read with Section 20 of the IGST Act, and conducted a physical verification of the goods.

Following this, the conveyance carrying the goods was detained under Section 129(1) of the CGST/SGST Act, 2017. The order of detention was issued in the prescribed format (Annexure P-7). A further notice in Form GST MOV-07 was issued on 28.05.2018, determining a tax and penalty amounting to Rs. 43,85,068/-. This notice was duly served on the authorized representative of the petitioner-company. Upon furnishing a Bank Guarantee, the goods along with the conveyance were released on 30.05.2018. However, no one appeared, and no reply was received to Annexure P-8, leading the Proper Officer to pass the impugned order dated 19.06.2018. The Bank Guarantee furnished by the petitioner was subsequently encashed on 04.07.2018.

Aggrieved by these orders and the actions of the Proper Officer, the petitioner challenged the order dated 19.06.2018 before the Appellate Authority, Haryana. The Appellate Authority, via order dated 12.03.2020, rejected the appeal. Consequently, the petitioner has brought the present writ petition to challenge the actions and orders passed by the authorities.

At the outset, counsel for the petitioner acknowledges that the petitioner’s case falls within the purview of Section 129 of the CGST/SGST Act, 2017 due to the violation of the Act.

In the present writ petition, the petitioner has challenged the orders dated June 19, 2018, issued by the Proper Officer-cum-Excise and Taxation Officer, Rohtak, and the subsequent affirmation of this order by the Appellate Authority on March 12, 2020. The petitioner, engaged in the manufacturing of pharmaceuticals and registered under the Goods & Services Tax (GST) Tariff-Goods, had their goods apprehended while in transit in Vehicle No. HR-61C-7811. Upon inspection, discrepancies were found, including incorrect transporter details on the six E-way Bills, which listed M/s Patel Integrated Logistics Limited (Division PAF) with GSTIN- 29AAACP6445K1Z1.

The Proper Officer, citing these discrepancies, issued Form GST MOV-2 under Section 68(3) of the CGST/HGST Act, along with Section 20 of the IGST Act, and performed a physical verification of the goods. Consequently, the conveyance was detained under Section 129(1) of the CGST/SGST Act, 2017, and a detention order was issued in the prescribed format (Annexure P-7). A further notice in Form GST MOV-07, determining tax and penalty amounting to Rs. 43,85,068/-, was served on the petitioner’s authorized representative. Following the submission of a bank guarantee by the petitioner, the goods and conveyance were released on May 30, 2018. Due to no appearance or reply to the subsequent notice (Annexure P-8), the Proper Officer issued the impugned order on June 19, 2018, leading to the encashment of the bank guarantee on July 4, 2018.

The petitioner, aggrieved by these orders and actions, appealed to the Appellate Authority, Haryana, which rejected the appeal on March 12, 2020. In the current petition, the petitioner challenges these decisions and actions by the authorities.

The petitioner’s counsel acknowledges that their case falls within Section 129 of the CGST/SGST Act, 2017, due to the E-way bill not being as prescribed by law. However, she disputes the quantum of tax imposed and the penalties, arguing that there was no intention to evade tax, and thus penalties should not have been levied. In contrast, the respondents’ counsel argues that the petitioner violated Section 68 of the CGST/SGST Act, 2017, and Rule 138 of the 2017 Rules, since the vehicle began its journey from the petitioner’s factory and later from the transporter’s godown without completing Part-B of the E-way Bill. She further contends that Rule 138(3) of the 2017 Rules does not apply as the goods had already been handed over to the transporter at Kundli, and the journey to Farukh Nagar, District Gurugram, where the vehicle was intercepted, exceeded the 50 km exemption limit specified under Rule 138(3).

Upon careful review of the records and arguments, the court found the petitioner’s contention that there was no intent to evade tax to be insufficient to contest the orders issued by the authorities. The established facts showed clear violations of the relevant statutory provisions, justifying the orders of detention, tax, and penalties imposed by the Proper Officer and upheld by the Appellate Authority.

Download PDF:
Sterile India Pvt. Ltd.

For Reference Visit:
Punjab and Haryana HIgh Court 

ReadAnother Case Law:                                    
GST Case law