TaxTMI 
TaxTMI 
2026 (1) TMI 197
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....2023 herein marked as Annexure-B. iii) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity." 2. Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that the petitioner /consigner purchased the subject goods from M/S. VRKP Sponge and Power Plant LLP, Bellary, who raised Tax invoice, E-invoice and e-way bill dated 29.01.2023 and entrusted the subject goods to a transporter to transport the same in vehicle No.KA-20 AB-4986 from Bellary to the premises of the petitioner at No.48, Kannur, Mangalore. The subject goods were loaded on to the vehicle on 29.01.2023 and left for its destination at Kannur, Mangalore, duly accompanied by Tax invoice, E-invoice, e-way bill and other documents. It is contended that the driver of the vehicle inadvertently and without any mala fide intention missed the route and drove the subject vehicle and goods to Moodabidire on 31.01.2023, when he stopped by the roadside for the purpose of having refreshments, at that time, the 2nd respondent intercepted the vehicle and inspected....
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....t, and detention, release and confiscation of such goods and conveyances, as clarified in Circular Nos. 41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018 - regarding Kind attention is invited to Circular No. 41/15/2018-GST dated 13th April, 2018 as amended by Circular No. 49/23/2018-GST dated 21st June, 2018 vide which the procedure for interception of conveyances for inspection of goods in movement, and detention, release and confiscation of such goods and conveyances was specified. 2. Various representations have been received regarding imposition of penalty in case of minor discrepancies in the details mentioned in the e-way bill although there are no major lapses in the invoices accompanying the goods in movement. The matter has been examined. In order to clarify this issue and to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as 'the CGST Act') hereby clarifies the said issue hereunder. 3. Section 68 of the CGST Act read with rule 138A of ....
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....s of the consignee to the extent that the locality and other details of the consignee are correct; (d) Error in one or two digits of the document number mentioned in the e-way bill; (e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct; (f) Error in one or two digits/characters of the vehicle number. 6. In case of the above situations, penalty to the tune of Rs. 500/- each under section 125 of the CGST Act and the respective State GST Act should be imposed (Rs. 1000/- under the IGST Act) in FORM GST DRC-07 for every consignment. A record of all such consignments where proceedings under section 129 of the CGST Act have not been invoked in view of the situations listed in paragraph 5 above shall be sent by the proper officer to his controlling officer on a weekly basis. 7. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow." 7. As can be seen from the aforesaid Circular, minor discrepancies in the documents have been directed to be considered for imposition of general penalty under Sectio....
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....the said guarantee in this regard is not absolute; law can regulate it & restrict too. Scope of right to movement is not the same always; it is variable depending upon the circumstances & conditions. For example, right to move becomes restrictive when a person moves with a firearm or when he uses vehicle for movement. It is because, the firearm & the vehicle are regulated by law in certain aspects and that affects the scope of right to movement otherwise vastly availing to citizens. That is how Article 19(5) i.e., restriction by law is conceived. Thus, a trader cannot claim unfettered right of movement whilst carrying goods that are regulated by law. However, in the absence of such law being shown, fetter cannot be imposed. (c) This case involves also the fundamental right to trade & business guaranteed u/s 19(1)(g) read with Article 301 of the Constitution. Therefore, it will have elements of right to movement, as well. It is open to a trader to take goods to the destination point in whichever route he opts, unless the law otherwise requires, destination point being intact. Such a right needs to be recognized as of necessity to trade or business. Mr. Hamilton, a co-author....
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....urse move with goods as vividly explained by noted novelist Dr. S L Bhyrappa in his famous work "Sartha" (2006), literally meaning a trading caravan; in ancient India, such caravans would travel to farthest lands for trade. In the instant case, driver of the conveyance left the usual track to venture in the other that had not found a place in the consignment documents, is undeniable. In fact, that was his admission and he gave his own reason for that which was not believed by the authorities as true. However, the question is whether law mandates conveyance in a particular route and prohibits alteration of travel route qua the one impressed in the consignment documents. We have not been shown any such law, rule or ruling. (f) What is required by law is the furnishing of consignment documents and specified particulars of consignor, consignee, goods, route maps & destinations. Requirement of furnishing particulars of route map, etc., is one thing, compulsive adherence to the impressed route is another. There is law with regard to the former, is true; but latter is non liquet i.e., an area where there is no binding rule. When law does not require giving of reasons for changing....
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....gal position that undervaluation cannot be a ground for seizure of goods in transit by the inspecting authority. In the instant case, there is no such indication." 6. What is stated above, in a measure, lends support to the case of respondent. 7. In the above circumstances, this Appeal being devoid of merits is liable to be and accordingly dismissed, costs having been made easy. 8. We place on record our appreciation for the research work done by Chamber Intern Mr. Arjun Vivekananda Harihar." 8. In Kamalesh steels case supra, the Telengana High Court held as under:- "39. Next we shall consider the relevant statutory provisions and Circulars issued by the Central Board of indirect Taxes and Customs. 40. It is important to keep in mind that CGST Act, 2017/Telangana GST Act,2017 are very recent laws and the common businessman is admittedly having difficulty to understand these enactments and the procedures they have introduced. 41. Also interpretation of taxing statutes should be done in a way to facilitate business and inter-State trading, and not in a perverse manner which would result in impediment of the same by harassing bu....
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.... goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within seven days of such detention or seizure, further proceedings shall be initiated in terms of Section 130: Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to epreciate in value with passage of time, the said period of seven days may be reduced by the proper officer." 43. Therefore, under the above provision there is power conferred on the respondents to detain goods while in transit if there is contravention of the provisions of the Act or the Rules made thereunder. 44. Section 68 of the CGST Act, 2017/TGST, 2017 provides that the Government may require the person in-charge of a conveyance carrying any consignment of goods of value exceeding a prescribed limit to carry certain documents and devices. 45. Rule 138-A of the Rules framed under the CGST Act mandates that a person in-charge of conveyance should carry invoice or bill of supply or delivery challan, and a copy of the e-Way Bill in physical form. 46. Rule 138-B permits the Commissioner or an Officer empowered by him to....
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.... the inspection proceedings, either by himself or through any other proper officer authorised in this behalf. Where circumstances warrant such time to be extended, he shall obtain a written permission in FORM GST MOV-03 from the Commissioner or an officer authorized by him, for extension of time beyond three working days and a copy of the order of extension shall be served on the person in charge of the conveyance. ...." These instructions issued by the Board are binding upon all Officers discharging under the Act. 48. In Synergy Fertichem (P.) Ltd. v. State of Gujarat [2020] 76 GSTR 81, the Gujarat High Court referred to another Circular dt.14-9-2018 and held as follows : "94. The Central Board of Indirect Taxes and Customs, New Delhi, has issued a Circular in F. No. CBEC/20/16/03/2017-GST, dated 14-9-2018, in regard to the procedure to be followed in the Interception of conveyances for inspection of goods in movement and detention, release and confiscation of such goods and conveyances'. 95. Our attention is drawn to paragraphs 3, 4, 5 and 6 of the said Circular, extracted below:".... 3. Section 68 of the CGST Act read with rule 13....
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.... (c) Error in the address of the consignee to the extent that the locality and other details of the consignee are correct; (d) Error in one or two digits of the document number mentioned in the e-way bill; (e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct; (f) Error in one or two digits/characters of the vehicle number. 6. In case of the above situations, penalty to the tune of Rs. 500/- each under section 125 of the CGST Act and the respective State GST Act should be imposed (Rs. 1000/- under the IGST Act) in FORM GST DRC-07 for every consignment. A record of all such consignments where proceedings under section 129 of the CGST Act have not been invoked in view of the situations listed in paragraph 5 above shall be sent by the proper officer to his controlling officer on a weekly basis 'the questions to be determined in these cases relate to the release of consignment and the quantum of penalty, if any, to be levied at this stage, and pending adjudication." 49. Interpreting the above provisions, the Gujarat High Court in Synergy Fertichem (P.) Ltd.'s c....
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.... The authenticity of the delivery challan is also not doubted. In such a situation, it would be too much for the authorities to straightway jump to the conclusion that the case is one of confiscation, i.e., the case is of intent to evade payment of tax." (Emphasis supplied) 50. We are in complete agreement with the ratio laid down by the Gujarat High Court in Synergy Fertichem (P.) Ltd.'s case (supra) and hold that: "(i) that at the time of detention and seizure of goods or conveyance, the first thing the authorities need to look into closely is the nature of the contravention of the provisions of the Act or the Rule; (ii) the second step in the process for the authorities to examine closely is whether such contravention of the provisions of the Act or the Rules was with an intent to evade the payment of tax; (iii) a holistic reading of the statutory provisions and the Circular noted above, indicates that the Department does not paint all violations/transgressions with the same brush and makes a distinction between serious and substantive violations and those that are minor/procedural in nature; and in a given case, the contravention....
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....he driver of the vehicle noted on 22-1-2020 that goods were to be delivered at IDA Jeedimetla. 58. The other reason mentioned is that 'the goods were being transported from Salem to Distillery Road, Secunderabad, but the vehicle is checked at IDA Jeedimetla'. 59. So the question is whether 'checking of the vehicle at IDA Jeetimetla, Hyderabad' is ground for detention of goods under section 129 of the Act or Rules made under the Act or as per the Circulars issued by Central Board of Indirect Taxes and Customs, GST Policy Wing. 60. It is not the case of the 1st respondent that mere checking of a vehicle or it being found at a different place without anything more, is by itself a 'taxable event' under the CGST Act/Telangana GST Act, 2017. 61. So, in our opinion, under these Acts, it is not permissible to detain a vehicle carrying goods or levy penalty on the sole ground that the vehicle is found at a wrong destination without anything more. 62. Admittedly, the vehicle was found at weigh bridge, IDA Jeedimetla and it is not the case of the 1st respondent that at the time of it's detention or check at that location....
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....nt failed to do so and also did not release the vehicle and the goods, the petitioner paid the tax and penalty under protest on 25-1-2020 and got released the goods. So there was no voluntary payment of tax and penalty by petitioner for the 1st respondent to plead any estoppel against the petitioner. 70. Accordingly, the Writ Petition is allowed; the action of the 1st respondent in detaining the vehicle carrying the goods purchased by petitioner on 22-01-2020 and forcing the petitioner to pay on 25-1-2020 a sum of Rs. 9,40,618/- towards tax and penalty is declared as illegal, arbitrary and violative of Article 14 and 265 of the Constitution of India apart from Article 301 of the Constitution of India and also the provisions of the Act and Rules made thereunder. Accordingly, the 1st respondent is directed to refund the above amount within six (06) weeks together with interest @ 7% p.a. from 25-1-2020 till date of payment. No costs. 71. Consequently, miscellaneous petitions, pending if any, shall stand closed. 9. So also, in R.K. Motors case supra, the Madras High Court held as under:- "4. The writ petitioner is an authorised dealer for Bajaj Auto Limite....
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....senting the writ petitioner. 6. No doubt the vehicle ought to have stopped at Virudhunagar and the goods ought to have been offloaded at Virudhunagar itself. But then, the question is whether a drastic order passed by the respondent herein was really warranted in the facts and circumstances of the case. 7. It is not in dispute that the writ petitioner is an authorised dealer of Bajaj Auto Limited. It is also not in dispute that the goods are covered by appropriate documents. The tax payable has also been paid by the writ petitioner's principal. Thus, it is not a case of any evasion of tax. It is not in dispute that the writ petitioner is carrying on the business of dealing in two wheelers for the past several years. The driver, who drove the vehicle in question is not a Tamilian. His name is Badrinath Bhandari. He hails from Maharashtra. 8. The learned counsel appearing for the writ petitioner states that the said driver knows neither English nor Tamil. He knows only Marathi and Hindi. 9. The specific stand taken by the writ petitioner is that the driver without knowing the correct route had taken a wrong turn and headed towards Sivakasi. ....
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....o pay a sum of Rs. 5,000/- [Rupees Five Thousand only] towards fine to the respondent, the orders impugned in this writ petition stands quashed. The respondent shall forthwith release the vehicle as well as the goods in question. Accordingly, this writ petition is allowed. No costs. Consequently, connected Miscellaneous Petition is closed. 10. A perusal of the material on record in the instant case will indicate that though the subject vehicle and goods were intercepted at Moodabidire from the driver of the vehicle, except the alleged statement of the driver in a cyclostyled form, the respondents have not placed any material to establish that there was deviation in the route by the petitioner; on the other hand, at the earliest point in time, in its objection dated 01.02.2023, the petitioner has specifically stated that due to the driver missing the route, he went to Moodabidire and parked the subject vehicle along with the goods there without any mala fide intention and in the absence of any mismatch or discrepancies found either in the documents or in the goods under transport, the proceedings may be dropped by imposing general penalty against the petitioner. As held ....