Penalty imposed u/s 129(3) of UPGST Act, Burden to Prove Double Movement of Goods based on same Documents lies on Dept: Allahabad HC [Read Order]

The Allahabad High Court has held that the burden to prove the double movement of goods based on the same documents lies on the department. The Court were deciding on the appeal against the seizure order imposing penalty under Section 129(3) of the Uttar Pradesh Goods and Service Tax Act, ( UPGST ) 2017.

M/S K Y Tobacco Works Pvt. Ltd, the petitioner challenged the seizure order imposing penalty under Section 129(3) of the UPGST and the appellate order.

It was submitted by the petitioner that at the time of the interception of goods, all relevant documents were present and matched the description of goods being transported. The goods were detained only based on an alleged statement by the Driver of the vehicle where he stated that he was transporting the goods for the second time using the same documents. It was submitted that this statement of the driver recorded on MOV-01 was never provided to the petitioner.

The Court observed that the counsel for the respondent could not produce the MOV-01 as it was not being provided by the officer concerned. Though a sheet was produced before the Court as the statement of the driver, the Court observed that no MOV-01 was accompanying such paper.

In M/s Anandeshwar Traders v. State of U.P. and Others, the court held that the positive burden to prove that goods had been transported on an earlier occasion lies on the Assessing Authority. The Court had observed that since no inquiries were made from the assesee, toll plaza, purchasing dealer or any other source as to whether goods had been transported earlier, presumption could not have been drawn by the authorities merely based on the e-way bill.

Relying on the decision of the Allahabad High Court in M/s Anandeshwar Traders, the Court held that the burden to prove the double movement of goods was on the department which it had not discharged.

A single bench of Justice Shekhar B. Saraf held that it is the duty of the authorities to ascertain whether the double movement of the goods has taken place actually.

While allowing the appeal, the Court directed the Commissioner, State Tax, U.P. to consider that the cases were being decided in favour of the assessee based on the inability of the counsel appearing on behalf of the department to effectively argue their case due to lack of support and documents being provided by the authorities.

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