GST seizure of returned hired equipment quashed where e-way bill, challan, and no tax evasion finding defeated coercive action.

GST seizure proceedings were held unsustainable where an old excavator, after being hired out, was moving back to its owner with the e-way bill accompanying the goods and a delivery challan produced before the seizure order. The machinery was treated as a return of goods rather than a sale transaction, the rental tax component had already been accounted for, and no tax evasion was found. In these circumstances, the basis for coercive action under GST was absent, and the seizure and connected proceedings were quashed.

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Issues: Whether the seizure and consequential proceedings under the GST law could be sustained where an old excavator owned by the petitioner was returning after being used on rent, the e-way bill accompanied the goods, the delivery challan was produced before the seizure order, and no finding of tax evasion was recorded.

Analysis: The goods were found to be the petitioner's own excavator returning from the user's site after being hired out on rent. The tax component arising from the rental transaction had already been paid and reflected in the books of account. On these facts, the movement of the machinery was treated as a return of goods and not as a sale transaction. The absence of the delivery challan at the time of interception was cured before the seizure order, and the appellate authority accepted that the challan was issued in accordance with GST law. Since the authorities did not record any finding of tax evasion, the foundation for invoking coercive proceedings was absent.

Conclusion: The seizure and the impugned GST proceedings were unsustainable and were quashed, with relief granted to the petitioner.

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