Driver’s Initial Statement Given More Weight than Subsequent Documents or Explanations: Allahabad HC Upholds GST Detention Order [Read Order]

The High Court of Allahabad, upheld the Goods and Service Tax (GST) detention order observing that the driver’s initial statement was given more weight than subsequent documents or explanations.

Aasar Scrap Traders, petitioner-assessee, through the counsel submitted that it was a proprietorship firm with GST registration. The petitioner purchased goods from M/s Jai Durga Scrap Traders, Aligarh, under tax invoice dated 15.08.2022 for Rs. 5,62,559, which were transported in Truck No. UP 81 W 7624.

After receiving the goods, they were reloaded for onward supply to SSC Enterprises, Muzaffarnagar, under another tax invoice dated 16.08.2022, and a valid e-way bill was generated.

On 17.08.2022, while the vehicle was on its way from Aligarh to Muzaffarnagar, it was intercepted by the Mobile Squad. The driver’s statement was recorded, and physical verification was carried out.

A detention order was passed, and notice was issued. Despite submitting a detailed reply, the authorities imposed tax and penalty through order dated 18.08.2022. The petitioner’s appeal was later dismissed on 14.07.2023, prompting the present writ petition.

The petitioner counsel submitted that the goods were wrongly seized despite all documents being in order. The detention was based only on assumptions of wrongful ITC, which was not permissible under the Act. Reliance was placed on the judgment of the Division Bench in M/s Gobind Tobacco Manufacturing Company & Another vs. State of U.P. & Others decided on 17.05.2022.

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The respondent counsel supported the impugned orders and submitted that the driver’s first statement showed the truck was loaded on 16.08.2022 and no goods were moved from Aligarh to Iglas. It was argued that the initial statement had greater evidentiary value than later explanations.

Reliance was placed on the judgment in M/s Ghata Mehandipur Balaji Grinding Works Private Limited vs. CCT decided on 25.03.2014, and it was contended that the case cited by the petitioner was not applicable.

Justice Piyush Agrawal after hearing the parties’ counsel, examined the records and noted that the driver had clearly stated that the goods were loaded at the Iglas godown on 16.08.2022 from morning to evening and transported directly from Aligarh By-pass to Bulandshahar to Meerut. The driver also stated that no goods were ever moved from Aligarh to Iglas. Consequently, the document suggesting otherwise was of no assistance to the petitioner.

The Court observed that, as held in M/s Ghata Mehandipur Balaji Grinding Works Private Limited, the driver’s statement at the first instance carried more weight than documents or explanations presented later.

The statement was not challenged at any stage, nor was there evidence that it was made under duress or improperly recorded. The petitioner did not claim that the driver’s signature was obtained on blank paper and filled in afterward.

Since the driver’s statement remained unrebutted, the impugned orders could not be deemed arbitrary. The bench concluded that the first-instance statement had greater evidentiary value than later explanations, and the judgment cited by the petitioner was not applicable.

In view of these facts, the Court found no reason to interfere with the impugned orders and dismissed the writ petition.

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