Validity of Seizure Order passed in absence of E-way bill.

PJ/Case Law/2018-2019/3519

Case: M/s Bhumika Enterprises

Citation: Writ Tax No. 564 of 2018 dated 03.04.2018

Issue: Validity of Seizure Order passed in absence of E-way bill.

Brief Facts: The petitioner is a registered dealer and has been allotted TIN by the Assessing Authority for carrying on the business for purchase and sale of Iron and Steel. The petitioner has affected the sale of Iron and Steel weighing 20 M.Ton for a sum of Rs.6, 00,000/- to M/s Ram Naresh Ramakant, Bindiki, Fatehpur. The purchaser situated at Bindiki, Fatehpur is also a registered dealer to whom the petitioner has raised tax invoice No.60 dated 25.3.2018. The invoice aforesaid indicates that the goods worth of Rs.6,00,000/- are sold on which the petitioner has charged the Central G.S.T. @ 9% to the tune of Rs.54,000/- as also the State G.S.T. @ 9% to the tune of Rs.54,000/- and the grand total therefore has been charged to the tune of Rs.7,08,000/-. The said goods were being transported from Varanasi to Bindiki, Fatehpur. The Mobile Squad Authority has detained the vehicle for verification of the goods and documents accompanying the goods.

Appellant’s Contention: The Appellant states that no opportunity of being heard was given to him before passing the seizure order dated 27.3.2018 under Section 129(1) of the Act by which the seizing authority has seized the goods on the ground that the tax invoice was kept in a sealed envelope. The appellant futher added that due to technical fault of the State Web-site E-way bill-02 could not be generated on 25.3.2018 before the movement of the goods from Varanasi to Fatehpur, however, the same was generated on 26.3.2018 in the morning which was much before the date of seizure order which was passed in the evening on 27.3.2018. The appellant claimed that since both the consignor and consignee are registered with the respective Assessing Authority and are allotted requisite GSTIN number therefore there was no reason to disbelieve the appellant’s contention. However the appellant agrees that he has made bona fide mistake by mentioning the GSTN number of a dealer of Allahabad instead of Fatehpur. Although, the same was rectified while downloading E-way bill-02, in which the correct registration number of consignor M/s Ram Naresh Ramakant, Bindki, Fatehpur was mentioned. The appellant further submitted that there was no occasion to evade the payment of tax as the tax amounting to the tune of Rs.1,08,000/- as C.G.S.T. and S.G.S.T. was charged by the appellant himself and the same was duly mentioned in the tax invoice separately.

Respondent’s Contention: The respondent stated that the tax invoice and the mobile number, which was found, belonged to another dealer situated at Allahabad and not the consignee situated at Bindiki, Fatehpur. Moreover, at the time of inspection/detention of the vehicle there was no E-way bill with the driver of vehicle. The respondent stated that it noticed that the transaction has been made with one unknown person and therefore it believed that there were chances of any misconduct by the appellant.

Reasoning of Judgement: The court stated that since the tax invoice indicating the tax charged was found during the course of inspection/detention and the fact that the E-way bill-02 was downloaded much before the seizure order, the authority decided to set aside the seizure order dated 27.3.2018 as well as the show cause notice issued under Section 129(3) of the Act for imposition of penalty.

Decision: The seizure order proved to be irrelevant.

Comment:The aforesaid judgment show the clear intent of the high court to protect the assessee from procedural non-compliances wherein government revenue is not impacted.
The importance was laid on the fulfillment of mandatory requirements provided under GST laws, and not on mere procedural lapses. This approach has lowered the mental burden of the assessees along with unnecessary litigation costs imposed.

Prepared by: Adit Gupta

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PJ/Case Law/2018-2019/3519

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