A decision is given by the High Court of Telangana in the case of Vijay Metal V. Deputy Commercial Tax Officer
The following Principle emerged from the decision
Whether one conveyance or goods vehicle can load goods for Two different destinations?
Yes – It has been held in the given case that a conveyance can load goods for more than one destination and there is no restriction for such kind of Practice. However, the goods loaded should be supported by the required documents as prescribed under Section 129 of CGST Act, 2017, and Rule 138 of CGST Rules, 2017 for each such consignment. Else, the goods will be liable to be detained.
Whether it is necessary to unload the goods at the location coming first in the course of transportation? If the goods are not unloaded at the location coming first in the course of transportation – are liable to be detained?
No – The is no such rule Prescribed in the GST Law. Hence, there may be various transactions of such nature for the sake of convenience across industries and the same shall not be liable to be detained under Section 129 of CGST Act, 2017 or the relevant rules.
|Vijay Metal (the Petitioner) filed a writ Petition before the High Court of Telangana on account of goods detained for the reason of “Suspicious Transaction” on account of taking a different route for the reason of operational convenience of conveyance.
|Facts of Case
|Reason for which goods were detained by the Department & Reply submitted by the Tax Payer to the Officer
|The contention of the Tax Payer
|The contention of the Department
|Principle Laid down by High Court
Note : – It’s not surprising that each and every transaction undertaken by Tax Payer is categorically not prescribed in the relevant laws and regulations. Acts & Rules specify the overall constitution within which the transaction should happen. The Judicial System Bolsters the overall functioning of the Act and rules.
The given case of Vijay Metal V. Deputy Commercial Tax Officer is a classic case wherein when the conveyance was intercepted by the Officer, it was contended that goods were not unloaded at the location coming first in the route of transportation. But the e-way bill of such goods was already concluded at the location coming first and therefore they were detained. The Officer didn’t consider the Operational convenience of the Transporter. However, each proceeding conducted under any Act by Officer demands the application of mind and verification of genuineness of the transactions. The given transaction was within the constitution framed by Section 129 of the CGST Act and Rule 138 of CGST Rules. Further, considering the principle of Preponderance of Probability, there was no intention to evade the payment of tax. Hence, the case was decided in the favor of Tax Payer. In times, when the implementation of GST Law is bumpy if all the taxpayers will be knocking on the door of the High Court through the means of Writ Petition – then there will torrential flow of litigation having serious ramifications. Ultimately, Sections 129 and 130 will have pyrrhic victory in such a manner.