TaxTMI 
TaxTMI 
2023 (7) TMI 817
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....d remaining amount was got financed by him. He has to pay installments. (ii) The petitioner contests imposition of penalty in lieu of confiscation of the vehicle, under Section 130 (2), third proviso of the Act. (iii) The vehicle was engaged by one M/s Om International Company, whose office was at Nagloi, West Delhi; the goods were being transported from Ballabhgarh, Punjab to Lakheempur, U.P.; [a sale invoice No. 150 dated 14.01.2023 to one M/s Adi Shakti Traders Nagasan Road, Lakeempur, U.P. was issued.] (iv) On 15.01.2023 at 10:39 P.M., at Kashipur-Rudrapur Highway, the Mobile Squad Authority intercepted the vehicle. The statement of the petitioner, who was the driver also, was recorded. The petitioner disclosed his address and mobile number along with the documents relating to the goods in transport i.e. the sale invoice. (v) The mobile squad made physical verification of the goods and documents and they did not find any discrepancy in the goods and the vehicle. The goods were found as per the sale invoice. (vi) Subsequent to it, on 19.01.2023, a show cause notice was issued to the petitioner as to why a fine of Rs. 10,98,000/- be no....
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....pancies in the aforesaid supply which the proper officer has mentioned in his MOV 10 and MOV 11, some of the discrepancies are highlighted as under:- (a) The supplier from involved in the supply of the goods being transported was found to be dubious firm as one more supply of the same supplier was also intercepted by the mobile squad on 09.09.2022 and proceedings under section 130 of the GST Act has also be initiated against the supplier and the supplier firm respondent no. 3 herein M/s Om International Company has also challenged the order passed under section 130 of GST Act before this Hon'ble Court by way of filing writ petition bearing No. 2383 of 2022 (M/S). It is also submitted here that the current status of the M/s Om International Company (Supplier herein) is that the GST Registration of Supplier stand cancelled from 10.02.2023. (b) That the goods being carried by the vehicle No. UK06-CA8300 was TMT Bar and which is an evasion prone commodity and was being supplied by a dubious firm as mentioned herein above. Moreover, the concerned vehicle was found to be operating on a different route and place (the place of supply mentioned invoice was from West Delhi ....
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....e for confiscation. (v) In order to attract the provision of Section 130 of the Act, it has to be shown that the act was done with intent to evade payment of tax. It is argued that in the instant case, there is no evidence to suggest that the petitioner, in any manner, intended to evade the payment of tax. 8. In support of his contention, learned Senior Counsel for the petitioner has placed reliance on the principle of law as laid down in the case of Synergy Fertichem Pvt. Ltd. v. State of Gujarat, 2019 SCC OnLine Guj 6127. 9. In the case of Synergy Fertichem (supra), the Hon'ble Gujarat High Court discussed the law on the point and in para 144, 149 and 183 observed as hereunder:- "144. Confiscation proceeding is a quasi-judicial proceeding and not a criminal proceeding. Ordinarily, proof beyond reasonable doubt and proof of mens rea are foreign to the scope of the confiscation proceeding. However, the language of the statute should be read closely. Sometimes, the language of the statute may indicate the need to establish the element of mens rea. It is true that mens rea is not an essential element for imposing penalty for breach of civil obligations or liab....
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.... The word "evade" in the context means defeating the provisions of law of paying tax. It is made more stringent by use of the word "intent". The assessee must deliberately avoid the payment of tax which is payable in accordance with law. However, the element of mens rea cannot be read into Section 130 of the Act. (iii) For the purpose of issuing a notice of confiscation under Section 130 of the Act at the threshold, i.e., at the stage of detention and seizure of the goods and conveyance, the case has to be of such a nature that on the face of the entire transaction, the authority concerned should be convinced that the contravention was with a definite intent to evade payment of tax. The action, in such circumstances, should be in good faith and not be a mere pretence. In other words, the authorities need to make out a very strong case. Mere suspicion may not be sufficient to invoke Section 130 of the Act straightway. (iv) If the authorities are of the view that the case is one of invoking Section 130 of the Act at the very threshold, then they need to record their reasons for such belief in writing, and such reasons recorded in writing should, thereafter, be looke....
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....t would be apt to reproduce the relevant provisions, which were referred during the course of arguments. 12. Section 68 of the Act empowers the competent person to inspect the goods in movement. It reads as follows:- "68. Inspection of goods of movement. - (1) The Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed. (2) The details of documents required to be carried under sub-section (1) shall be validated in such manner as may be prescribed. (3) Where any conveyance referred to in sub-section (1) is intercepted by the proper officer at any place, he may require the person in charge of the said conveyance to produce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods." 13. Section 122 (1)(xiv) of the Act is as hereunder:- "122. Penalty for certain offences. - (1) Where a taxable person who - ..................................
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....e issued without giving the person an opportunity of being heard. (5) Where any goods or conveyance are confiscated under this Act, the title of such goods or conveyance shall thereupon vest in the Government. (6) The proper officer adjudging confiscation shall take and hold possession of the things confiscated and every officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession. (7) The proper officer may, after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government." 15. Section 164 of the Act reads as follows:- "164. Power of Government to make rules. (1) The Government may, on the recommendations of the Council, by notification, make rules for carrying out the provisions of this Act. ..................................................................... ............................................................
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....ere may not be two opinions about it that Section 164 of the Act enables the Central Government to frame Rules so as to carry out the provisions of the Act and sub-section (4) of it also provides that the Rules may also provide that contravention thereof shall be liable to penalty. It is also true that Section 122(1) (xiv) also provides for penalty, if the goods are transported without cover of documents, as specified. These penal provisions cannot per se exclude operation of the provisions of Section 130 of the Act, which is quite different and acts in different sphere. It relates to confiscation. 22. It is the case of the respondents that the petitioner was not carrying e-way bill, which means that the proceeding of confiscation has been initiated under Section 130 (1) (iv) of the Act. 23. It has been argued on behalf of the petitioner that, in fact, the provisions of Section 130 of the Act would not come into operation merely because the incharge of the conveyance is not carrying documents. What is argued is that "intention to evade tax" has to be established. In this aspect, learned counsel has placed reliance in the case of Synergy Fertichem (supra). In the case of Syner....
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....sporter on the said portal on the basis of the information furnished by the registered person in Part A of FORM GST EWB-01: Provided that the registered person or, the transporter may, at his option, generate and carry the e-way bill even if the value of the consignment is less than fifty thousand rupees:" 27. Carrying e-way bill by the transporter is a requirement under the Rules, which has the sanction of the provisions of the Act. Therefore, it cannot be said that it is the duty of the owner of the goods alone to generate e-way bill. If e-way bill is not generated by the owner of the goods, who transports such goods, it is the transporter, who has to generate e-way bill. In the instant case, it has not been done. 28. The main argument on behalf of the petitioner is that it is not a case of evasion of tax; it is merely failure to carry the e-way bill, which is requirement of the Rules and as such is punishable under Section 164(4) of the Act or under Section 122(1)(xiv) of the Act. 29. Penalty under Sections 164(4) and 122(1)(xiv) of the Act may not come in way of the competent officer to proceed under Section 130 of the Act, if other circumstances permit to tak....