VSL Alloys (India) (P.) VS State of Uttar Pradesh

In this case, the petitioner, a private limited company engaged in the manufacture, supply, and export of industrial stainless steel (SS) tubes, fittings, and pipe fittings, is registered under the Goods and Services Tax (GST) regime. The company’s office is located in the Industrial Area of Sahibabad, District Ghaziabad.

The petitioner received an order from M/s Kansara Laljibhai Mohanlal, based in Rajkot, Gujarat, for the supply of 4942 kg of stainless steel welded pipes, as detailed in tax invoice dated April 7, 2018. The total value of the goods was Rs. 5,43,631/-, with an Integrated Goods and Services Tax (IGST) of 18% applied. The goods were to be delivered to the consignee in Rajkot.

To fulfill this order, the petitioner engaged M/s Jai Hind Tempo Transport Service, Sahibabad, Ghaziabad, for transportation. The goods were loaded onto vehicle number U.P.16-AT-5489, accompanied by challan/GR number 1116 dated April 7, 2018. The petitioner also generated an e-way bill, with Unique No. 431003252396, from the Central Government’s web portal on April 7, 2018, at 8:05 PM. This e-way bill included comprehensive details such as the consignor’s and consignee’s information, challan number, date, and the value of the goods.

The core issue involves the legal proceedings surrounding the detention and seizure of these goods and the vehicle, in connection with GST compliance.

The petitioner, a private limited company engaged in the manufacture, supply, and export of industrial stainless steel tubes, fittings, and pipes, is registered under GST and is based in Sahibabad, Ghaziabad. The petitioner received an order from M/s Kansara Laljibhai Mohanlal in Rajkot, Gujarat, for the supply of 4942 kg of stainless steel welded pipes, which were invoiced at ₹5,43,631. The petitioner charged IGST at 18% on this amount. The goods were dispatched via M/s Jai Hind Tempo Transport Service and loaded onto vehicle U.P.16-AT-5489 with Challan/GR No. 1116 dated April 7, 2018. An e-way bill with Unique No. 431003252396 was generated on the same date, containing all necessary details including consignor, consignee, challan number, date, value, HSN Code, delivery place, and reason for transportation.

However, the petitioner’s counsel argues that the e-way bill was invalid due to missing information in Part B. The vehicle, after being loaded with goods, left Sahibabad around 8:33 P.M. and acquired a Kata Purchi (transportation document) around 9:20 P.M. The vehicle was intercepted at Mohan Nagar, Ghaziabad, on April 8, 2018, at 12:15 A.M. by the Assistant Commissioner (Commercial Tax), Mobile Squad, Unit-III, Ghaziabad. The interception memo issued under Section 129(1) of the UPGST Act, 2017, indicated that although the e-way bill had a unique code, Part B was incomplete as the vehicle number was not mentioned. The respondent directed a physical verification of the goods due to the incomplete e-way bill.

The primary issue centers around the validity of the e-way bill and the proper completion of its sections, particularly Part B, which is crucial for the legality of the intra-state transportation of goods under the GST framework.

The case involves a petitioner, a private limited company engaged in the manufacture and export of stainless steel tubes, fittings, and pipe fittings, which is registered under the Goods and Services Tax (GST) regime. The company’s office is located in the Industrial Area of Sahibabad, District Ghaziabad.

The company received an order from M/s Kansara Laljibhai Mohanlal, located in Rajkot, Gujarat, for 4942 kg of stainless steel welded pipes, against a tax invoice dated April 7, 2018. The total value of the goods was Rs. 5,43,631, and the company charged Integrated Goods and Services Tax (IGST) at the rate of 18% on this amount. The goods were to be transported using M/s Jai Hind Tempo Transport Service, and were loaded into vehicle number U.P.16-AT-5489, with a challan/GR no. 1116 dated April 7, 2018. The petitioner generated an e-way bill with Unique Number 431003252396 dated April 7, 2018, at 8:05 PM from the Central Government’s web portal. This e-way bill included all necessary details such as consignor and consignee information, challan number, date, goods’ value, HSN code, place of delivery, and the reason for transportation.

However, the e-way bill had a discrepancy; it lacked information in Part-B, which is required for the validity of the bill. The vehicle, after loading the goods, departed at approximately 8:33 PM on April 7, 2018, and procured a Kata Purchi (receipt) at around 9:20 PM. It was en route from Sahibabad to Rajkot when it was intercepted by the Assistant Commissioner (Commercial Tax, Mobile Squad, Unit-III, Ghaziabad) on April 8, 2018, at 12:15 AM at Mohan Nagar, Ghaziabad.

The Assistant Commissioner issued an interception memo under Section 129(1) of the Uttar Pradesh GST Act, 2017. The officer noted that although the e-way bill had a Unique Code, Part-B was incomplete as it did not mention the vehicle number. This omission led the officer to direct a physical verification of the goods. On April 9, 2018, the verification revealed the incomplete Part-B of the e-way bill. Consequently, the officer detained the vehicle and goods, issuing an order under Section 129(1) of the Act, assessing the value of the goods at Rs. 5,43,631. This was followed by a notice under Section 129(3) of the Act, addressing the issue of the incomplete e-way bill and resulting in the detention and possible penalty related to the irregularity.

**Summary:**

The case involves a petitioner, a private limited company engaged in the manufacture, supply, and export of industrial stainless steel tubes, fittings, and pipe fittings, which is registered under the Goods and Services Tax (GST). The petitioner’s office is located in Sahibabad, Ghaziabad. They received an order from M/s Kansara Laljibhai Mohanlal in Rajkot, Gujarat, for 4942 kg of stainless steel welded pipes, billed at Rs.5,43,631. The petitioner charged Integrated Goods and Services Tax (IGST) at 18% on this amount. The goods were dispatched using vehicle number U.P.16-AT-5489 and an e-way bill with Unique No. 431003252396 was generated on 07.04.2018, although it was not completed in Part B regarding the vehicle number.

The vehicle, after loading the goods, left Sahibabad at approximately 8:33 PM on 07.04.2018 and obtained a Kata Purchi around 9:20 PM. However, the vehicle was intercepted by the Assistant Commissioner, Commercial Tax, Mobile Squad, Ghaziabad at Mohan Nagar on 08.04.2018 at 12:15 AM. The interception memo was issued under Section 129(1) of the Uttar Pradesh GST Act, 2017, noting that Part B of the e-way bill was incomplete, lacking the vehicle number.

Upon physical verification on 09.04.2018, it was confirmed that Part B of the e-way bill was not filled out properly. Consequently, the vehicle and goods were detained, and an order under Section 129(1) was issued, assessing the goods’ value at Rs.5,43,631. A notice under Section 129(3) demanded payment of Rs.97,854 as tax liability and an equal amount as penalty.

The petitioner challenged the seizure order and penalty notice through a writ petition. They argued that all necessary documents accompanied the goods, and despite the e-way bill’s Part B being incomplete, there was no intention to evade tax. The petitioner explained that the vehicle’s number could not be provided in Part B as the goods were to be transferred from the factory to a transport company and then to Rajkot, Gujarat, by a different vehicle whose number was unknown at the time of generating the e-way bill.

Additionally, the petitioner cited Notification No.12/2008-Central Tax dated 07.03.2018, aiming to support their argument that the incomplete Part B of the e-way bill did not warrant such drastic measures, and the issue should be seen as an administrative oversight rather than deliberate tax evasion.

In the case at hand, the learned counsel for the respondent has supported the seizure order but has conceded that all necessary documents were present when the vehicle was intercepted. The only issue noted was that Part-B of the e-way bill was not filled out. Despite this, it was acknowledged that there appeared to be no intention to evade tax, as the invoice indicated that Integrated Goods and Services Tax (IGST) at 18% was charged.

After reviewing the arguments and documents submitted with the writ petition, the court has agreed with the petitioner’s counsel. The court found no ill intention on the part of the petitioner. It was determined that the petitioner was not required to complete Part-B of the e-way bill, which includes the vehicle number, before the goods were loaded for transportation to their destination.

The court highlighted that all necessary documents were properly accompanying the goods, and the details provided were adequate. The failure to mention the vehicle number in Part-B was deemed insufficient grounds for the seizure of the goods. The court concluded that the seizure order was entirely unjustified. Furthermore, once the petitioner provided evidence supporting their claim, it was incumbent upon the respondent to issue a reasoned order. However, the seizure and penalty order lacked any reasoning or discussion, making it procedurally flawed. The court criticized the respondent for not considering the provided evidence and failing to provide a detailed explanation for their decision.

In the matter at hand, the learned counsel for the respondent supported the order of seizure but acknowledged that all the necessary documents were present when the vehicle was intercepted and the seizure order was issued. However, it was noted that Part-B of the e-way bill was incomplete. Despite this, the counsel conceded that there was no apparent intention to evade tax since the invoice indicated that Integrated Goods and Services Tax (IGST) at 18% had been charged.

Upon reviewing the submissions and documents related to the case, the court agreed with the petitioner’s counsel. The court found no evidence of ill intent from the petitioner and concluded that the requirement to fill Part-B of the e-way bill with the vehicle number before the goods were loaded was not obligatory under the circumstances.

The court determined that the mere omission of the vehicle number in Part-B did not justify the seizure of the goods. It was concluded that the seizure order was illegal because it lacked proper justification and reasoned explanation. The respondent had not provided any reasons or discussed the merits of the case in the impugned seizure order and penalty notice.

As a result, the court quashed the seizure order dated April 9, 2018, issued under Section 129(1) of the Act, as well as the subsequent show cause notice dated April 9, 2018, issued under Section 129(3). The respondents were directed to immediately release the seized goods and vehicle to the petitioner.

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