Goods Sent for Weighment Must Accompany Delivery Challan: Allahabad HC rules Later Submission Defeats Purpose of S. 129 and R. 138 [Read Order]

According to Justice Piyush Agarwal, “If the argument of the petitioner is accepted that for sending the goods for weighment, no specified documents are required to be accompanied with the goods during transit, then it will provide a handle to produce the documents at a later stage of interception/seizure and to take shelter that the goods were sent for weighment, which in turn will frustrate the very purpose of section 129, read with Rules 138, of the Act.”

The petitioner, M/s VRS Foods Ltd., had sold battery scrap to M/s Shiva Traders, Ghaziabad. For weighment purposes, the truck carrying the goods was sent to Balaji Dharmkanta, for which a gate pass was issued.

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However, the driver failed to carry the gate pass and other supporting documents. The vehicle was intercepted on 25 February 2022, and a detention order was passed on 28 February 2022 under Section 129(3) of the UPGST Act for transporting goods without any accompanying documents.

The petitioner contended that under Rule 138(14)(n) of the GST Rules, no e-way bill is required if goods are sent for weighment within 20 kilometers of the business premises. It was argued that the goods were later accepted by the consignee and payment was made through banking channels, establishing absence of any intent to evade tax.

The state counsel supported the impugned orders and submitted that at the time of interception and seizure, no document, whatsoever, was produced. It said that the document filed at a later stage is a clear-cut contravention of the provisions and the Rules that no documents, whatsoever, were accompanying the goods at the time of seizure or detention.

He further submitted that it is not the case of the petitioner that the goods in question were not liable for tax. Once the goods are liable to tax, even not accompanying the requisite document as prescribed under the Act, the action taken against the petitioner could not be said to be arbitrary, but in accordance with law.

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The Court rejected the petitioner’s arguments and observed that at the time of interception, the goods were being transported without any accompanying documents. It was further noted that the delivery challan and other supporting papers were produced only after the seizure order, which amounted to a clear violation of the statutory provisions.

The court, pointing out the mandatory nature of compliance, held that even when goods are sent for weighment, a delivery challan must accompany the consignment, and submission of documents at a later stage cannot validate the transportation.

The bench said that “The stand taken by the petitioner was that the goods sent for weighment within 20 kms. therefore, no e-way bill or documents were required, cannot be accepted. Delivery challan was required to be accompanied the goods, but the same was produce after seizure of the goods.”

The high court noted that accepting the petitioner’s contention would allow businesses to justify absence of documents at interception by later producing paperwork, defeating the purpose of Section 129 of the Act and Rule 138 of the GST Rules, which cannot be accepted.

Accordingly the court upheld the proceedings under Section 129 of the GST Act and dismissed the petition.

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