GST: No Inquiry If Goods in Transit were accompanied with required Documents, rules Rajasthan High Court [Read Order]

The Rajasthan High Court held that the scope of enquiry ends if goods in transit are in conformity with the documents under the GST Act.

The petitioners, H.R. Enterprises and the driver, Gurpreet Singh have submitted that the goods and vehicle are lying stationed/detained with the respondent since March 11, 2021; inspection and physical verification of the goods including its weighment has already been done.

Hence, goods and vehicles are not required, at least for the purpose of inquiry. If they are detained for indefinite period, the condition of the stationary truck with weight of 38.120 MT on its tyres, and loss of business of the hopeless driver will be irreversible.

The single judge bench of Justice Dinesh Mehta said that all stakeholders are treading in the new GST regime with uncertainties as the path is comparatively unfamiliar, unmarked and unpaved. The parameters of the authorities’ powers and dealers’ duties or responsibilities or liabilities are yet to be demarcated.

The court observed that Notice is an example of such uncertainty. A perusal of the said notice issued in MOV-07 shows that respondent has jumped to propose penalty under clause (b) of Section 129(1)(a) on the pretext that as per the driver, no-one has appeared for the owner of goods and proposed penalty as high as 50% of the value of goods. As against this, he was firstly required to propose a penalty under clause (a) of Section 129(1), which would have been equal to the amount of tax. Given that the penalty under clause (a) would have been Rs.1,93,460/- and proposed penalty under clause (b) is Rs.10,74,780/-, in the opinion of this Court, the statutory remedies will be inefficacious.

The High Court has issued notices to respondents wherein jurisdiction of Anti-evasion/check post/ Squad officer was challenged in terms of section 68 of the Act.

The court directed the respondents to release the goods and vehicle detained in case petitioner furnishes two solvent sureties to the tune of Rs.15 lakhs executed by dealers registered in the State of Rajasthan. He shall not insist upon furnishing bank guarantee or cash security.

Advocates Sharad Kothari along with N.K Taparia appeared for the petitioners assisted by Mayank Taparia.

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