TaxTMI 
TaxTMI 
2026 (9) TMI 1491
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....we find the matter should be heard in Division Bench. 2. BRIEF FACTS 2.1 The records reveal that the vehicle was carrying Pan Masala and Tobacco products, declared to be transported from Kanpur to Auraiya. The relevant documents included invoices issued by M/s Jai Enterprises, having GSTIN 09ATQPS3526G1Z7, along with two e-way bills generated on 11.05.2018 at 11:06 A.M. and 11:10 A.M. 2.2 As per the verification by Mobile Squad, Bhognipur Unit, Kanpur Dehat and information obtained from Bara Jod Toll Plaza, the same vehicle, loaded with goods, had crossed the toll plaza at approximately 12:22:05 P.M. on 11.05.2018, travelling from Kanpur towards Etawah. The vehicle was thereafter recorded as travelling back towards Kanpur at approximately 2:56 P.M., apparently in an empty condition. Subsequently, the same vehicle was again found carrying goods and travelling from Kanpur towards Auraiya at approximately 7:19 P.M. 2.3 The department consequently formed the view that the goods covered by the invoices and e-way bills had already been transported during the earlier movement of the vehicle and that the same documents were being re-used for a second transportation of goods. Ph....
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....la and Tobacco covered by the disputed invoices and e-way bills. 2.11 The appellant further contended that it was practically impossible for the vehicle to travel from Bara Toll Plaza to Auraiya, unload the goods and return to the toll plaza within approximately two and a half hours, considering the distance involved. A statement/affidavit of the driver was relied upon in support of the explanation. 2.12 The departmental authorities relied principally upon the toll plaza records, photographs and movement data relating to vehicle No. UP77AN0423. 2.13 According to these records, the vehicle was: 1. recorded at 12:22:05 P.M. travelling from Kanpur towards Etawah with goods 2. recorded at approximately 2:56 P.M. travelling back towards Kanpur in an empty condition; and 3. again, recorded at 7:19:14 P.M. travelling from Kanpur towards Auraiya with goods. 2.14 The departmental authorities found that the photographs showed the vehicle carrying similar goods during the relevant movements. No independent documentary evidence, such as an invoice, transport document, details of the consignor or consignee, or other valid records, was produced to establish....
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....the appellant submitted that there is no mens rea on the part of the appellant. The tax has been charged in the bills as such there is no mala fide on the part of the appellant, E-invoice as well as e-way bill as stated in the facts of the case were downloaded at the time of transportation of the goods, before detention and seizure. The transaction was within the period of validity. 3.6 The show cause notice cannot be issued on the mere base of suspicion, there should be a prima facie material on the basis of which the authority may arrive at the satisfaction that the goods are liable to be seized under Section 129 of the GST Act. 3.7 The goods were detained on flimsy ground, on the basis of presumptions and surmises. The detention and entire proceedings are bad in law. 4. SUBMISSION OF APPELLANT 4.1 The appellant, M/s Jai Enterprises, has filed written submissions in Appeal No. APL/57/2026 against First Appellate Order No. 532 dated 19.12.2019. The appellant states that it is engaged in the purchase and sale of pan masala and tobacco and that the goods in question were being transported to M/s Krati Agencies, Auraiya, under valid tax invoices and e-way bills dated 11.0....
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....me Court and Allahabad High Court, emphasizing that strong suspicion, presumption or doubt cannot substitute legal proof. Reliance is also placed on decisions holding that where goods are accompanied by valid documents and the e-way bill is valid, detention/seizure and consequential penalty proceedings cannot be sustained merely on suspicion. 4.9 The appellant states that tax and penalty amounting to Rs. 6,96,184 were recovered by encashing the bank guarantee, apart from Rs. 69,619 (10%) deposited pursuant to the High Court's order dated 16.07.2018. It is therefore prayed that the impugned proceedings and penalty be set aside and appropriate relief be granted, as the transportation was supported by valid statutory documents and there was no established violation or intent to evade tax. 4.10 The appellant has relied upon several judicial precedents of the Hon'ble Supreme Court of India and the Hon'ble High courts, which are as below- I. In the case of Umacharan Shaw & Bros. v. CIT (1959) 37 ITR 271 (SC) II. In the case of State of Kerala v. M. M. Mathew (1978) 42 STC 848 (SC) III. In the case of Kumar Electric Works v. CST [1984] UPTC 1272 I....
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....on'ble Supreme Court in case of Assistant Commissioner (ST) & Ors. v. M/s Satyam Shivam Papers Pvt. Ltd. & Anr., SLP (C) No. 21132/2021, decided on 12.01.2022. "The Hon'ble Supreme Court declined to interfere with the well-reasoned judgment of the Telangana High Court which had found that no fault or intent to evade tax could be inferred merely from the circumstances relied upon by the revenue." In the case of M/s Shri Surya Traders vs. Union of India decided on 06.01.2022 the Hon'ble High Court of Allahabad held that - "if the movement of the goods is in compliance of the provisions of GST Act, the same can't be detained on the basis of presumptions and assumptions." In the case of State of Kerala vs M.M. Mathew reported in 1978 STC (42) 848 that the presumption can not take place of evidence - It has been held by the Hon'ble Supreme Court that Strong suspicion, strange coincidences and grave doubt cannot take place of legal proof. In the case of M/s. Anandeshwar traders Vs. State of U.P. [ 2021 U.P.T.C. (Vol-197)-421] Tax and Penalty was imposed on the petitioner on the allegation of reuse of E-way Bill-In appeal filed by the assess, the appeal autho....