Undervaluation of Huge Quantity of Pan Masala and Tobacco without Downloading Mandatory E-Way bill: Allahabad HC Confirms Detention of Goods [Read Order]

The Allahabad High Court confirmed detention of goods on the ground that there was an undervaluation of huge quantity of Pan Masala and Tobacco without downloading mandatory E-Way bill.

The petitioner, M/s Radha Fragrance is a registered dealer under the Haryana State Goods and Service Tax Act, 2017 and is in the business of manufacturing and sale of Pan Masala and Chewing Tobacco. The petitioner, who had received orders for the supply of Pan Masala and Chewing Tobacco from two registered dealers of State of Jharkhand was sending the goods, as claimed, through four Tax Invoices.

The goods in transit from the State of Haryana to Jharkhand were intercepted by a mobile squad. During vehicle verification conducted, it was found that the vehicle was transporting 120 Cartons of Pan Masala and tobacco in place of 60 Cartons as was evident from tax invoices produced by the driver.

The goods were not carrying E-Way Bill in view of Rule 138 as the value of goods were claimed to be below Rs.50,000/-. The Mobile Squad, on inspection, found that in each carton there were 200 boxes and, in each box, 32 pouches were kept and on every pouch, MRP Rs.4/- was printed and the total value of 60 Cartoons came to Rs.15.

The Counsel for the appellant contended that as the goods of Pan Masala and Tobacco, which were sent to two different consignees, were less than Rs.50,000/-, no necessity arose to download them.

The Court of Justice Rohit Ranjan Agarwal observed that “, it can be safely said that the action of the State Authorities in detaining the goods and imposing tax and penalty, which have been affirmed by the first Appellate Authority, needs no interference of this Court as the dealer cannot be permitted to take shelter of the fact that no E-Way bill is required in case of goods valued less than Rs.50,000/-.”

The Court concluded by stating that if such a conduct of a dealer is permitted, it will harm the business world and lead to a parallel economy and the very purpose of enactment of Goods and Service Tax Act would frustrate. The idea of ‘One Nation One Tax’ was to subsume all other taxes into one and bring transparency in the business world.

To Read the full text of the Order CLICK HERE

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