2023 (8) TMI 838 - HC - GST

E-way bill expiry during valid goods transit doesn't justify confiscation without proper inquiry into delay reasons

M/s Rateria Laminators Pvt. Ltd. Versus Additional Commissioner Grade 2 And Another

The Allahabad HC quashed confiscation proceedings against goods transported with expired E-way bills. The petitioner's goods transited from Uttar Pradesh ... Confiscation of goods alongwith conveyance - expired E-way bill - HELD THAT:- It is admitted that goods of the petitioner transited from the State of Uttar Pradesh to the State of West Bengal and the goods were accompanied by requisite documents such as invoices, E-way bills, GR etc. The E-way bills were valid upto 12.3.2023 whereas the goods have been intercepted on 14.3.2023. Thereafter proceedings were initiated only the ground that the goods were transited after expiry of the E-way bills. No other discripancy has been found either in quality, quantity or goods as disclosed in the invoices, E-way bills or GR. The Division Bench of this Court in M/S GOBIND TOBACCO MANUFACTURING CO. AND ANOTHER VERSUS STATE OF U.P. AND 2 OTHERS [2022 (5) TMI 1022 - ALLAHABAD HIGH COURT] has quashed the proceedings on the facts of that case as at the time of movement of the goods Covid-19 was at peak and there was restrictions in the movement, therefore, the Division Bench of this Court had quashed the detention and directed for release of the goods and also imposed costs. The facts of the present case is entirely different as stated above. Therefore the arguments of the petitioner before this court that if the dealer does not come forward for depositing the penalty amount as determined under section 129(3) of the Act the proceedings ought to have been initiated under sections 73, 74 and 75 of the Act read with section 122 of the Act cannot be permitted to be raised at this stage as neither in the reply to the show cause notice nor before the appellate authority any submission was made. Further since the petitioner has submitted its reply taking the stand that there was break down of the vehicle and the driver fell ill but no reason has been assigned by any of the authorities in the impugned orders for disbelieving the same - since the authorities below have not recorded any findings with regard to the submissions made by the petitioner the impugned orders dated 27.3.2023 and 18.4.2023 as well as seizure memo dated 23.7.2023 could not be sustained in the eye of law and are hereby quashed. The matter is remitted back to the respondent no.2 - Petition allowed. Issues:The issues involved in the judgment are the quashing of orders passed under UPGST Act 2017, release of seized goods, imposition of penalty, and the legality of transit of goods after expiry of E-way bills.Quashing of Orders:The petitioner filed a writ petition seeking to quash orders passed by Additional Commissioner and Assistant Commissioner under the UPGST Act 2017. The petitioner contended that the goods were detained due to expired E-way bills, despite no discrepancy in the goods. The authorities rejected the petitioner's explanation without justifiable grounds, leading to the quashing of the impugned orders.Release of Seized Goods:The petitioner, a registered company, faced detention of goods by respondent no.2 due to expired E-way bills during transit from Uttar Pradesh to West Bengal. The petitioner explained that delays were due to unforeseen circumstances like the driver falling ill and vehicle breakdown. Despite the lack of evidence discrediting the petitioner's claims, the authorities imposed penalties. The court ruled in favor of the petitioner, quashing the orders and directing the release of the detained goods.Imposition of Penalty:The respondent authorities proposed penalties under UPGST Act sections 129(1)(a) and 129(1)(b) for transiting goods with expired E-way bills. The petitioner's appeal against the penalty was rejected without proper consideration of the circumstances leading to the delay. The court found no justifiable grounds for rejecting the petitioner's claims and ruled that penalties were unjustified, leading to the quashing of the orders.Transit of Goods After Expiry of E-way Bills:The transit of goods from Uttar Pradesh to West Bengal was interrupted when the E-way bills expired before reaching the destination. The authorities detained the goods based on this expiration, alleging an intention to evade tax payment. The petitioner explained that delays were due to uncontrollable events, like the driver's illness and vehicle breakdown. Despite lack of evidence contradicting the petitioner's claims, penalties were imposed. The court found the authorities' actions unjustified, quashing the orders and remitting the matter for further consideration with evidence presentation and reasoned decision-making within specified timelines.