ORDER
1. Heard Shri Puneet Arun, holding brief of Shri Aloke Kumar, learned counsel for the petitioner and Shri Ravi Shankar Pandey, learned ACSC for the State – respondents.
2. The instant writ petition has been filed against the impugned order dated 10.04.2019 passed by the respondent no. 3 as well as the impugned order dated 14.09.2020 passed by the respondent no. 4.
3. Learned counsel for the petitioner submits that the petitioner is a Proprietorship concern and is registered under the GST Act. In the normal course of its business, the petitioner purchased MS Bar from one M/s Laxmi Traders, Chhattisgarh. Thereafter, the seller generated e-way bill for outward supply and other requisite documents. After arrival of the goods in the State of U.P., the petitioner instructed the driver of the vehicle for delivery of the goods at the business premises of one M/s Steel Center, Ghazipur, along with tax invoice, but on account of some technical glitch, the e-way bill was not generated, when the respondent no. 3 intercepted the vehicle during the course of unloading. Thereafter, on 10.09.2019, the petitioner presented the e-way bill before the authority concerned, but the respondent no. 3 on the same day passed the impugned order under section 129(3) of the GST Act. Aggrieved against the said order, the petitioner preferred an appeal, which has been rejected vide impugned order dated 14.09.2020 affirming the levy of penalty.
4. Learned counsel for the petitioner further submits that while passing the impugned order, the respondent no. 3 travelled beyond the scope of section 129 of the GST Act. He further submits that on account of technical glitch in the server, e-way bill could not be generated while issuing tax invoice. He further submits that there is no dispute with regard to quantity and quality of the goods and therefore, it cannot be said that the petitioner has intention to evade payment of tax. He further submits that the tax invoice and e-way bill was produced before passing of the seizure order, but the same has not been looked into while passing the impugned order. In support of his submissions, learned counsel for the petitioner has placed reliance on the judgements of this Court in Sleevco Traders v. Additional Commissioner, Grade – 2 (Appeal) Fifth Commercial Tax (Allahabad)/[Writ Tax No. 464/2021, decided on 17.05.2022].
5. Per contra, learned ACSC supports the impugned orders and placed reliance on the judgements of this Court in Mohini Traders v. State of U.P. (Allahabad)/[Writ Tax No. 1558/2022, decided on 28.08.2025] and Akhilesh Traders v. State of U.P. [ (Allahabad)/[Writ Tax No. 1109/2019, decided on 20.02.2024] and submits that at the time of interception, when the goods were unloaded at a different place, the proceedings are justified.
6. After hearing learned counsel for the parties, the Court has perused the record.
7. It is not in dispute that the goods in question were imported from M/s Laxmi Traders, Ambikapur, Chhattisgarh, who had issued tax invoice, e-way bill and RR. When the goods entered the State of U.P., on instruction from the petitioner, the same were sent to M/s Steel Center, Ghazipur and tax invoice was also issued. It has been stated that due to technical glitch in the server, e-way bill could not be generated at that time. The record shows that the vehicle, from which the goods were transported from Chhattisgarh to U.P. is Truck No. CG 15 DM 5452 and the same was found at the time of detention of the goods. Once the import of goods is not in dispute and the document of import was found at the time of interception and seizure of the goods, at best, it could be said that the place of delivery was mis-matched.
8. The petitioner, before passing of the seizure order, produced the e-way bill. Once there was no dispute with regard to quality, quantity or weight of the goods in question accompanying with the documents from Chhattisgarh to State of U.P., no adverse inference can be drawn against the petitioner.
9. It is also not in dispute that the petitioner was the importer of the goods in question. It is a matter of common knowledge that in the business – trade and practice, usually, the goods so purchased are not unloaded in case a buyer is found to save the loading -unloading charges and thus, the goods were directed to be unloaded at the place of subsequent purchaser, i.e., M/s Steel Center, Ghazipur.
10. The authorities have not whispered a word that the goods purchased by the dealer from Chhattisgarh are different than found at the time of unloading, which has subsequently been seized in absence of e-way bill.
11. The stand taken by the petitioner that there was a technical glitch has not been disputed at any stage. The mens rea for evasion of tax cannot be levelled against the petitioner as the petitioner has purchased the goods from Chhattisgarh, along with genuine documents and e-way bill generated accompanying the goods from Chhattisgarh has not been cancelled. Once the genuineness of the documents accompanying the goods from Chhattisgarh to U.P. is not doubted, no evasion of tax can be levied or attributed to the petitioner merely on the basis of change of place of destination.
12. This Court in Sleevco Traders (supra), which has been affirmed by the Apex Court in Additional Commissioner Grade-2 (Appeal) Fifth Commercial Tax v. Sleevco Traders GSTL 257 (SC)/[(2023) 8 Centax 173 (SC)], has held as under:-
“12. The record further reveals that the e-way bill generated by the Maharastra party where the name of the petitioner and for delivery of the goods was to be made to the buyer of the petitioner i.e. K.R. Industries, Sandila, U.P. was specifically mentioned. In other words e-way bill clearly mentions the name of the buyer i.e. petitioner and ship to K.R. Industries, Sandila (U.P.). The e-way bill, generated by the Maharastra party was valid up to 15.2.2020, copy of which has been filed as Annexure no. 1 to the present petition. It is not a case of the department that the goods which were coming in pursuance of the purchase order of the petitioner from Maharastra which were to be delivered to the buyer of the petitioner i.e. K.R. Industries, Sandila, U.P. is different than the goods mentioned in the tax invoice given by the petitioner. Once the goods in question i.e. PVC Resin which was coming from Maharastra and was to be delivered at Sandila to K.R. Industries, tax invoice on which I.G.S.T. was charged has not been disputed, therefore, no contravention of the provisions of the Act can be attributed. Once before starting the journey e-way bill was generated from Maharastra and ending at Sandila, at the place of ultimate purchaser i.e. K.R. Industries was mentioned, it can not be said that there was any contravention of the provisions of the Act. The department was well aware of the fact that the goods in question was to be delivered at Sandila (U.P.). It is not the case of the department at any stage that the goods which were coming from Maharastra, the delivery of the same was taken from Transporter and the goods were unloaded in the business premisses of the petitioner and thereafter the goods were again sent from the business premisses of the petitioner to its ultimate buyer i.e. K.R. Industries, Sandila. Once the delivery of the goods which has not been taken by the petitioner, has not been disputed by the Revenue as well as validity of the e-way bill generated by Maharastra party, which was valid up to 15.2.2020 i.e. the date of detention and passing of the order under Section 129 (3) of the G.S.T. Act, there cannot be any violation or contravention of the provisions of G.S.T. Act as well as the Rules framed thereunder. The purpose of Rule 138 A is that the information should be given to the department in respect of movement of the goods having value of more than Rs. 50,000/-. The Revenue has neither disputed the e-way bill generated by Maharastra party nor the goods in question were found different than mentioned in the e-way bill of the Maharastra party and the tax invoices issued by the petitioner. Some difference of value has been mentioned which occurs only on charges of C.G.S.T. and S.G.S.T. on the tax invoice issued by the petitioner cannot suggest any contravention of the provisions of the Act read with Rule 138 A of G.S.T. Rules. Once the valid document i.e. e-way bill was accompanying with the goods, the authorities ought to have release the vehicle.
13. On identical set of fact, the Apex Court in the case of Assistant Commissioner (S.T.) and others v. M/s Satyam Shivam Paper Pvt. Limited and another in Special Leave to Appeal (c) No. 21132 of 2021 decided on 12.1.2022, while dismissing the appeal of State has enhanced the cost and observed as under:-
“The analysis and reasoning of the High Court commends to us, when it is noticed that the High Court has meticulously examined and correctly found that no fault or intent to evade tax could have been inferred against the writ petitioner. However, as commented at the outset, the amount of costs as awarded by the High Court in this matter is rather on the lower side. Considering the overall conduct of the petitioner No.2 and the corresponding harassment faced by the writ petitioner we find it rather necessary to enhance the amount of costs.
Upon our having made these observations, learned counsel for the petitioners has attempted to submit that the questions of law in this case, as regards the operation and effect of Section 129 of Telangana Goods and Services Tax Act, 2017 and violation by the writ petitioner, may be kept open. The submissions sought to be made do not give rise to even a question of fact what to say of a question of law. As noticed hereinabove, on the facts of this case, it has precisely been found that there was no intent on the part of the writ petitioner to evade tax and rather, the goods in question could not be taken to the destination within time for the reasons beyond the control of the writ petitioner. When the undeniable facts, including the traffic blockage due to agitation, are taken into consideration, the State alone remains responsible for not providing smooth passage of traffic.
Having said so; having found no question of law being involved; and having found this petition itself being rather misconceived, we are constrained to enhance the amount of costs imposed in this matter by the High Court.
The High Court has awarded costs to the writ petitioner in the sum of Rs. 10,000/- (Rupees Ten Thousand) in relation to tax and penalty of Rs.69,000/-(Rupees Sixty-nine Thousand) that was sought to be imposed by the petitioner No.2. In the given circumstances, a further sum of Rs. 59,000/-(Rupees Fifty-nine Thousand) is imposed on the petitioners toward costs, which shall be payable to the writ petitioner within four weeks from today. This would be over and above the sum of Rs. 10,000/- (Rupees Ten Thousand) already awarded by the High Court.
Having regard to the circumstances, we also make it clear that the State would be entitled to recover the amount of costs, after making payment to the writ petitioner, directly from the person/s responsible for this entirely unnecessary litigation.
This petition stands dismissed, subject to the requirements foregoing.
Compliance to be reported by the petitioners”
14. In view of above facts as stated above, the Court finds that there is neither any intention to evade the payment of tax nor any fault nor any contravention of the Act as all valid documents were accompanying with the goods as required under the Act, therefore, the proceedings initiated against the petitioner cannot sustain and are hereby quashed.”.
13. In view of the peculiar fact of the case, the judgements cited by the learned ACSC in Mohini Traders (supra) and Akhilesh Traders (supra) will be of no aid to him.
14. As observed above, this Court feels that neither there is any intention to evade payment of tax, nor there is any contravention of the Act as all valid documents were accompanying the goods in question. Moreover, the e-way bill was produced before passing of the seizure order.
15. In view of the aforesaid facts & circumstances of the case, the impugned order dated 10.04.2019 passed by the respondent no. 3 as well as the impugned order dated 14.09.2020 passed by the respondent no. 4 are hereby quashed.
16. The writ petition succeeds and is allowed.
17. The authority concerned is directed to refund any amount deposited by the petitioner within a period of two months from the date of production of a certified copy of this order.