The Allahabad High Court allowed the assessee to release detained goods without e-waybills after paying 200% of Goods and Services Tax on invoice value.
It was alleged that the petitioners S.K. Trading Co with the allegations that petitioner no.1 placed an order for a supply of mixed ready-made garments, which were being transported by petitioner no.2. It is stated that on 13.09.2022 the goods while in transit were intercepted and a physical verification report was prepared on 17.09.2022 in form GST MOV-04 and no discrepancy was found in the quantity of the goods in question.
It was stated that on 21.09.2022, a detention order was passed detaining the goods in question mainly on the ground that the goods were without an E-Way bill. It was argued that although under Section 129(3) of the U.P. GST Act, there is a prescription for the issuance of a notice in Form GST MOV-07, however, the notice was not issued in the format as prescribed but was issued by an authority whose name is not even specified as the order itself recorded that the same was issued for the authority and not by the authority.
It was contended that in the event Part – B of the E-Way Bill was not being carried, no penalty is imposable. He further argued that in any event, the detaining authority does not have the jurisdiction to value the goods as has been done.
It was stated that if the petitioner is either a consignor or a consignee, he has to be treated as an owner of the goods and thus, the provisions of Section 129(1)(b) of the Goods and Services Tax Act are not invokable as has been done by the department.
A Single judge bench comprising of Justice Pankaj Bhatia observed that the petitioner has to be treated as the owner of the goods in view of the law laid down in the case of M/s Margo Brush India and held that the impugned insofar as it imposes the burden on the petitioner to get the goods released in terms of Section 129(1)(b) of the GST Act is bad in law.
The Court remanded the matter to the Assessing Authority to pass fresh orders treating the petitioner to be the owner of the goods in terms of the mandate of Section 129(1)(a) of the Goods and Services Tax Act treating the valuation of the goods as specified in the invoice.
Further directed the respondents to release the goods to the petitioners if the petitioners offer to pay two hundred per cent of the tax payable on the goods valuing the same based on the valuation as shown in the invoice.
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