Goods Sent for Job Work must Accompanied with Delivery Challan and E-way Bill: Allahabad HC [Read Order]
In the absence of a delivery challan and e-way bill, goods sent for job work cannot be considered as being accompanied with proper documentation.
Eway - bill - Taxscan
Eway - bill - Taxscan
In an important ruling, the Allahabad High Court has ruled that goods sent for job work must mandatorily be accompanied by a delivery challan and e-way bill under Goods and Services Tax ( GST ).
The Court observed that “Once there was neither any delivery challan as required under Rule 45 read with Rule 55 of the GST Rules nor any e-way bill was accompanying in respect of the goods sent for job work, the proceedings initiated against the petitioner cannot be said to be illegal or arbitrary.”
Usha Wire Netting, the petitioner is a proprietorship firm engaged in manufacturing wire netting, barbed wires, nails, and welded mesh, challenged an order dated 31 January 2021 passed under Section 129(3) of the CGST/UPGST Act.
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The petitioner had purchased goods from a supplier in West Bengal for transportation to Ghaziabad, U.P., but directed the vehicle to deliver the goods first to a job worker, located only 1 km away from its premises.
The goods were intercepted on 18 April 2019, and though the driver produced certain documents, no delivery challan or job work-specific documents were handed over at the time of interception.
The petitioner argued that there was no intention to evade tax since the delivery challan and e-way bill were generated and produced before the seizure order was passed. It was further submitted that the tax invoice and e-way bill had been duly prepared, but these were not considered by the authorities. The petitioner therefore sought quashing of the impugned order.
The State, however, contended that at the time of interception, the goods were not accompanied with the requisite documents.
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It was submitted by the counsel of the state that goods sent for job work must be strictly in compliance with Rule 45 and Rule 55 of the GST Rules. These provisions mandate that inputs or capital goods sent for job work must be covered by a delivery challan issued by the principal, and such challan must conform to the prescribed particulars.
Additionally, where goods are transported under a delivery challan, an e-way bill must also be generated as per Rule 138.
Justice Piyush Agrawal, after hearing the matter, held that the petitioner’s case was squarely covered by the Nippon Tubes decision, which made it clear that in the absence of a delivery challan and e-way bill, goods sent for job work cannot be considered as being accompanied with proper documentation.
The Court said that compliance with Rules 45 and 55 is mandatory, and any lapse would justify action under Section 129 of the GST Act. Accordingly, the writ petition was dismissed, with the Court declining to interfere in the impugned orders.
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