News
6
Jan
2022
Case :- WRIT TAX No. - 1146 of 2021
Court No. - 1
Case :- WRIT TAX No. - 1146 of 2021
Petitioner :- S/S Shri Surya Traders
Respondent :- Union Of India And 4 Others
Counsel for Petitioner :- Aditya Gupta,Harsh Vardhan Gupta
Counsel for Respondent :- A.S.G.I.,C.S.C.
Case :- WRIT TAX No. - 1146 of 2021
Petitioner :- S/S Shri Surya Traders
Respondent :- Union Of India And 4 Others
Counsel for Petitioner :- Aditya Gupta,Harsh Vardhan Gupta
Counsel for Respondent :- A.S.G.I.,C.S.C.
Hon'ble Piyush Agrawal,J.
1. Heard Sri Aditya Gupta, learned counsel for the petitioner
and Sri Jagdish Prasad Mishra, learned Standing Counsel for
the State.
2. With the consent of the parties, the present writ petition is being decided finally without calling for the affidavits.
3. The present petition has been filed assailing the order dated
8.4.2021 passed by the respondent no. 3 by which the appeal of
the petitioner has been rejected and the order dated 16.10.2019
under Section 129 (3) of UPGST Act, 2017 was confirmed.
8.4.2021 passed by the respondent no. 3 by which the appeal of
the petitioner has been rejected and the order dated 16.10.2019
under Section 129 (3) of UPGST Act, 2017 was confirmed.
4. Counsel for the petitioner submits that petitioner is a
registered dealer and engaged in the business of selling Ancle
(Sweet Supari) and Varanasi Ashik (Betel Nut Product). In the
normal course of business, 90 bags of Betel Nut Product were
sold to two different registered dealers by issuing two tax
invoices, were being transported to its destination and the same
were along with tax invoices & e-way bill. The said goods were
intercepted by the proper officer on 9.10.2019 around 17:33
hours at Varanasi. On the physical verification, three bags of
Betel Nut Product were found without tax invoice and a show
cause notice was issued to the petitioner and in reply to the
show cause notice, the petitioner has submitted tax invoice
issued in the name of M/s Lal Ji Pan Bhandar, Tikona Park,
Nawabganj, Gonda. He further submitted that the said tax
invoice was handed over to the transporter but by mistake he
left it behind. He further submits that since the value of the
goods was less than Rs. 50,000/-, therefore, e-way bill was not
generated. He further submits that so far as the consignment of
87 bags sold to M/s Karuna Nidhan Agency are completed in all
respect, the said goods should have not been seized to that
extent. If any, discrepancy can be attributed it should be with
regard to three bags only. He prays that the goods be released
without security and writ petition be allowed.
registered dealer and engaged in the business of selling Ancle
(Sweet Supari) and Varanasi Ashik (Betel Nut Product). In the
normal course of business, 90 bags of Betel Nut Product were
sold to two different registered dealers by issuing two tax
invoices, were being transported to its destination and the same
were along with tax invoices & e-way bill. The said goods were
intercepted by the proper officer on 9.10.2019 around 17:33
hours at Varanasi. On the physical verification, three bags of
Betel Nut Product were found without tax invoice and a show
cause notice was issued to the petitioner and in reply to the
show cause notice, the petitioner has submitted tax invoice
issued in the name of M/s Lal Ji Pan Bhandar, Tikona Park,
Nawabganj, Gonda. He further submitted that the said tax
invoice was handed over to the transporter but by mistake he
left it behind. He further submits that since the value of the
goods was less than Rs. 50,000/-, therefore, e-way bill was not
generated. He further submits that so far as the consignment of
87 bags sold to M/s Karuna Nidhan Agency are completed in all
respect, the said goods should have not been seized to that
extent. If any, discrepancy can be attributed it should be with
regard to three bags only. He prays that the goods be released
without security and writ petition be allowed.
5. Per contra, Sri Jagdish Prasad Mishra, learned Standing
Counsel has tried to justify the impugned order and submitted
that in view of Section 129(3) read with Rule 138 providing for
issuance of e-way bill which requires that all transanction
accompanying the goods, e-way bill must be issued. He further
submits that the case in hand, only one e-way bill was issued
for 87 bags but with regard to three more bags no e-way bill
was there and tax invoice was submitted along with the reply to
the show cause notice, therefore, there was contravention of the
provisions of the Act. He further submits that in the event, if the
consignment of various dealers were going and there were any
discrepancy with regard to any of the consignment, the
consignment as a whole has to be seized and therefore tries to
justify the seizure order and demand of security.
Counsel has tried to justify the impugned order and submitted
that in view of Section 129(3) read with Rule 138 providing for
issuance of e-way bill which requires that all transanction
accompanying the goods, e-way bill must be issued. He further
submits that the case in hand, only one e-way bill was issued
for 87 bags but with regard to three more bags no e-way bill
was there and tax invoice was submitted along with the reply to
the show cause notice, therefore, there was contravention of the
provisions of the Act. He further submits that in the event, if the
consignment of various dealers were going and there were any
discrepancy with regard to any of the consignment, the
consignment as a whole has to be seized and therefore tries to
justify the seizure order and demand of security.
6. The Court has heard the parties and perused the record.
7. Admittedly, the petitioner have sold the goods to two
different registered dealers. The petitioner being a registered
dealer have duly issued two tax invoices of the goods in
question. The authorities have not disputed the issuance of tax
invoices. An adverse view has been drawn that after
interception, another tax invoice for three bags of Betel Nut
Product in favour of M/s Lal Ji Pan Bhandar, Tikona Park,
Nawabganj, Gonda have been submitted along with the reply to
the show cause notice just to cover the transaction in question.
It is a matter of common knowledge that after the detention,
show cause notice was issued and in reply to the show cause
notice, bill/tax invoice no. 19-20/950 dated 9.10.2019 was
submitted in which all details were mentioned as required under
the Act and no discrepancy whatsoever have been pointed out
by any of the authorities in it. If the dealer has submitted the tax
invoice along with the reply to the show cause notice, no
adverse inference can be drawn. If before the seizure order, the
documents were submitted and if the same is not accepted,
mere issuance of show cause notice will be redundant. It is well
settled that the quasi judicial authority while exercising of its
statutory powers must have to act fairly with open mind in the
proceedings. The person who is subjected to the show cause
notice must get an impression that the reply to the show cause
notice will be not an empty ceremony and he will mere knock
his head against the impenetrable wall. Once along with the
reply to the show cause notice tax invoice was submitted for
three bags of Betel Nut Product in the name of M/s Lal Ji Pan
Bhandar, Tikona Park, Nawabganj, Gonda, the authorities must
have to act fairly while adjudicating the same specially when
have the powers to take punitive step against a person, whom
show cause notice was issued.
8. Once along with the reply, the tax invoice was submitted the
value of which was less than fifty thousand and as per Rule
138, there was no requirement for generating of e-way bill to
the said transaction. If the authorities were of the opinion that
the transaction were not duly recorded in the books of account
or had committed any contravention of the provisions of the
Act, they are well equipped with all the provisions to make an
inspection/survey at the business premises of the petitioner in
accordance with law but the authorities were not justified in
detaining / seizing and demanding the security of the goods as
documents accompanying the goods as well as submitted along
with the reply fully covers the transaction in question and by no
stretch of imagination it can be attributed any contravention of
the provisions of UPGST Act or Rule.
value of which was less than fifty thousand and as per Rule
138, there was no requirement for generating of e-way bill to
the said transaction. If the authorities were of the opinion that
the transaction were not duly recorded in the books of account
or had committed any contravention of the provisions of the
Act, they are well equipped with all the provisions to make an
inspection/survey at the business premises of the petitioner in
accordance with law but the authorities were not justified in
detaining / seizing and demanding the security of the goods as
documents accompanying the goods as well as submitted along
with the reply fully covers the transaction in question and by no
stretch of imagination it can be attributed any contravention of
the provisions of UPGST Act or Rule.
9. The submission of learned Standing Counsel to the extent
that if the goods are in transit and any transaction is less than
fifty thousand and then too, the whole transaction are required
to be covered by e-way bill. If the said submission so advanced
by the learned Standing Counsel is taken to be correct then
sealing provided in Rule 138 that if the goods or transaction
having value of more than fifty thousand only required for
generating of e-way bill will be redundant.
that if the goods are in transit and any transaction is less than
fifty thousand and then too, the whole transaction are required
to be covered by e-way bill. If the said submission so advanced
by the learned Standing Counsel is taken to be correct then
sealing provided in Rule 138 that if the goods or transaction
having value of more than fifty thousand only required for
generating of e-way bill will be redundant.
10. Further the submission of the learned Standing Counsel that
if any discrepancy is found in the consignment being
transported, may be of various dealers, whole consignment can
be detained/seized and security can be demanded, is of no
substance and he has also failed to show any authority or
provision of the Act in support thereof. Every transaction has to
be looked into independently. In case sales were made to one
registered dealer then something can be said but not otherwise.
11. More precisely perusal of Rule 138-way bill requires if the
value of the transaction is more than Rs. 50,000/- then only eway bill is required.
So far as the consignment of 87 bags are
concerned which was duly accompanying with all proper
documents as prescribed under the Act/Rule, the authorities
were not justified in seizing and demanding security for release
of the same.
concerned which was duly accompanying with all proper
documents as prescribed under the Act/Rule, the authorities
were not justified in seizing and demanding security for release
of the same.
12. The record further reveals that so far as 87 bags of Betel
Nut product were accompanying with all proper documents.
The documents of 3 bags were produced along with the reply of
the show cause notice but the authorities below were not
justified in detaining / seizing the goods and demanding of
security as there was no contravention of the provision of the
Act. The authorities have illegal and in arbitrary manner have
referred the various discrepancies such as the pouches were not
having batch number, packing date, expiry date, manufacturing
date and referred that under the Food Safety Regulation, the
said dates / details were required. But so far as the G.S.T. is
concerned, the authorities have failed to record any provision
for justification of the seizure of the goods in question.
13. A pointed query was put to Sri Jagdish Prasad Mishra,
learned Standing Counsel to show the provisions on the said
ground whether seizure can be made but the answer was in
negative and accepted that in the absence of any specific
contraventions or the provision of the Rules, the seizure of the
goods as well as demand of security for release of the same,
cannot be justified.
14. In view of aforesaid, the orders dated 8.4.2021 passed by
respondent no. 3 and order dated 16.10.2019 passed by
respondent no. 5 are hereby quashed.
15. Before parting with the judgment, the Court is constrained
to observe that the State Government have tried to create an
atmosphere for free flow of trade and commerce so that a good
business environment can be developed in the State of Uttar
Pradesh which can be used for development purpose but the
State Authorities in their whims and fencing are bend upon to
harass the trading community of the State. The present case is a
glaring example of the mischievous of the State Authorities
which needs to be checked at the end of the State Government
immediately.
16. The writ petition is allowed with cost of Rs. 20,000/-
(twenty thousand) payable to the petitioner. The cost shall be
paid within a period of one month from today. The respondents
are at liberty to recover the said cost from the erring officer.
17. Any amount deposited in terms of impugned order, the same
shall be refunded in accordance with law within a period of two
months from today.
18. Copy of this order be sent to the Chief Secretary,
Commissioner Commercial Tax, Uttar Pradesh, Lucknow for
necessary action.
Order Date :- 6.1.2022
SA