In a landmark decision, the Allahabad High Court quashed the detention of goods belonging to M/s Vishal Steel Supplier, which were intercepted by authorities on the grounds that the transportation route deviated from the usual path. The court found that no provision under the Goods and Services Tax ( GST ) law mandates the disclosure of the specific route for transportation, and the detention was based on mere speculation.
In this case, the goods were being transported from Muzaffarnagar to Ghaziabad with all required documentation, including the e-way bill and tax invoice. The goods were detained near Hapur, as the authorities suspected the goods might be unloaded there, despite the documentation being in order. The authorities inferred this intention based solely on the fact that the driver had a mobile number of a local dealer and had taken an alternate route.
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Praveen Kumar represented the petitioner while the respondent-Central GST Authorities were represented by the Central Standing Counsel.
Rule 138A(1) of the Central Goods and Services Tax Rules states that the invoice or bill of supply or delivery challan, as the case may be and a copy of the e-way bill in physical form or the e-way bill number in electronic form or mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the Commissioner.
However, this will not apply in case of movement of goods by rail or air or vessel.
Also, in case of imported goods, the person in charge of a conveyance shall also carry a copy of the bill of entry filed by the importer of such goods and shall indicate the number and date of the bill of entry in Part A of FORM GST EWB-01.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
However, anything contained under Rule 138A(1)(b) of the CGST Rules, the Commissioner by notification require the person in-charge of the conveyance to carry the tax invoice or bill of supply or bill of entry or a delivery challan, where the goods are transported for reasons other than by way of supply.
However, the court stated that unlike the earlier VAT law, GST does not require transporters to declare the route of transportation.
The court noted that, in the absence of any discrepancy in the goods or intention to evade tax, detention could not be justified.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
The Allahabad High Court Single Bench of Justice Piyush Agrawal cited a prior ruling in M/s Om Prakash Kuldeep Kumar to reinforce that the power to detain and seize can only be exercised if the goods are not accompanied by genuine documents.
The Allahabad High Court ruled in favour of the petitioner, quashing the orders from the tax authorities, and directed the refund of any deposited amount.
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