Non-compliance with GST Rules for Job Work Transport: Allahabad HC Confirms Penalty Due to Incomplete Challan [Read Order]

The High Court of Allahabad,confirmed the penalty due to non-compliance with Goods and Service Tax(GST) Rules for job work transport, finding that the petitioner failed to issue a complete challan.

Famus India, petitioner-assessee, is a registered firm with GSTIN No. 09AAAPF7319M1ZJ. The petitioner ordered 16.7 tons of iron steel from M/s R.G. Steels, Ghaziabad, with Bill No. 0140 dated 27.6.2019. The goods were being transported in a vehicle with registration no. UP 77 N 8477. On 28.6.2019, the goods were intercepted by the Mobile Squad.

It was found that the unloading place didn’t match, and a show cause notice was issued for Rs. 1,14,804/-. After paying the amount, the goods were released, and MOV 09 was issued on 29.6.2019, imposing tax and penalty. The petitioner’s appeal was dismissed on 8.9.2020.

GST Appeals & Appellate Procedures Click here

The petitioner argued that the goods had proper documents and were unloaded at the job worker’s premises instead of its own. Since the documents were correct, the petitioner claimed there was no violation of the Act, and the proceedings were unfair. The petitioner relied on the judgment in M/s Shyam Sel and Power Limited Vs. State of UP and others.

In response, Additional Chief Standing Counsel (ACSC) supported the impugned order. He argued that the goods could be detained under Section 129 of the Act due to violations of Rule 45 and Rule 55, which require a filled challan for goods sent to a job worker. He stated the seizure and penalty were justified.

He also pointed out that the petitioner hadn’t challenged the findings of fact, so the petition should be dismissed.

Read More: Kerala HC Directs to dispose of Income Tax Appeal filed 9 Years Ago

Justice Piyush Agrawal, after hearing both parties, reviewed the records. It was confirmed that the goods were transported from Ghaziabad to Meerut on 28.6.2019, but they were found at a different destination than stated in the documents.

GST Manual (Acts & Rules) Click here

The petitioner claimed the goods were sent for job work and that a challan was issued, arguing no violation occurred. However, ACSC stated that the challan was incomplete, violating Rule 45 and Rule 55 of the GST Rules, which require a proper challan for goods sent to job workers.

The Court examined the challan produced by the ACSC and found it lacked necessary details, violating the Rules. The bench concluded that the proceedings under Section 129 of the GST Act were not arbitrary.

In short,the writ petition was dismissed.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates