GST: TDF Forms Not Required for Inter-State Supply of Goods, says Allahabad HC [Read Judgment]

In another petition on GST filed by Satyendra Goods Transport Corp, the Allahabad High Court held that T.D.F. forms are not required to be carried as the Central Government, who is the only authority empowered to prescribe required documents for inter-state supply of goods, had not issued a notification under rule 138 of the Central Goods and Services Tax (CGST) Rules 2017.

The assessee’s 220 pieces of Chocolate Display Cooler while being transported from Uttarakhand to West Bengal. The goods were intercepted at Lucknow, the State of U.P.  The assessee had already paid the Integrated Goods and Services Tax at the rate of 28%. The State officials sought T.D.F. Form and the presented form related to a different transport and to different goods. Proceedings under section 129 of the U.P.G.S.T. Act 2017were initiated against the truck-driver. The truck along with goods was seized and a show cause was served on the same day. Thereafter, an order under section 129(3) for payment of tax and penalty under clause (b) of section 129(1) was passed by the proper officer.

The Counsel for the assessee pleaded that as the transaction was an inter-state supply of goods, it was covered under Integrated Goods and Services Tax Act 2017 and that as per section 20. (xv) thereof, in matters of inspection, search, seizure, and arrest, provisions of the Central Goods and Services Tax Act 2017 were applicable. The counsel further contended that Section 68 empowered the Government to demand the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified, to carry with him such documents and such devices as may be prescribed under Rule 138 of the CGST 2017. As no notification has been issued, he argued that the said rule was inoperative and that there was no requirement of carrying such document on the relevant date, i.e.17/12/2017.

The Counsel for the Revenue argued that Section 6 of the CGST Act 2017 empowered State officials to act as proper officers for the purpose of the CGST Act 2017.  He pointed out that there existed a notification dated 21st July 2017 under Rule 138 of U.P.G.S.T Act 2017 prescribing a T.D.F. Form in case of transportation of taxable goods valuing Rs. 5000.00 or more from a place outside Uttar Pradesh to a place outside the State i.e. in the event of inter-State trade and the same not having been compiled, action of seizure and imposition of penalty under section 129 of U.P.G.S.T. Act 2017 was clearly in accordance with law and did not suffer from any error.

The Bench comprising of Justice Rajan Roy & Justice Prashant Kumar observed “In this view of the matter we are of the considered view that on the relevant date i.e. 17.12.2017 there was no requirement of carrying T.D.F. Form-1 in the case of an inter-State supply of goods. In fact, on the relevant date there was no prescription of the documents to be carried in this regard under Rule 138 of the C.G.S.T. Act 2017, accordingly, the seizure and penalty imposed upon the petitioners based on the notification dated 21.7.2017 issued under Rule 138 of the U.P.G.S.T. Act 2017, which was not applicable, is clearly illegal.”

Relying on the decision of the High Court of Kerala in the case of ASCICS Trading Company vs. Assistant State Tax Officer & Anr., the division bench of Allahabad quashed the ongoing proceedings.