Appeal |
Satyam Shivam Papers (P.) Limited (Petitioner) filed writ Petition before High Court of Telangana on account goods detained for the reason of “Expiry of E-way Bill” |
Facts of Case |
The petitioner is a Private Limited Company registered under the Companies Act, 1956, and carries on trading business in all kinds of paper. The Petitioner has made an intra-State supply of paper through a tax invoice M/s. Sri Ayappa Stationery and General Stores in Telangana State and had also generated an e-way bill. |
Reason for which goods were detained by the Department |
During the course of Transportation within the city, the conveyance was stopped for the verification of documents and since the e-way bills was valid only up to 5-1-2020 12:00 a.m. and were not valid on 6-1-2020 when the checking was done by him, he was entitled to detain them; and that the drivers of the auto trolleys expressed ignorance of the expiry of the e-way bill. |
Contention of the Tax Payer |
- Petitioner contends that the auto trolley started for delivery of the paper on 4-1-2020 to the consignee, but on its way, on account of a political rally being conducted by certain political parties opposing Citizenship Amendment Act (CAA) and National Register of Citizens (NRC), traffic was blocked. Therefore, the auto trolley could not move forward or backward. Therefore, the auto trolley driver took the trolley to his residence with the goods so as to deliver them on the next working day. i.e. on 6-1-2020. Petitioner contends that on 6-1-2020, the auto trolley was on its way for delivery of the paper to the buyer/consignee but it was detained by the Deputy State Tax Officer because the validity of the e-way bill had expired proposing to impose tax and penalty.
- The Officer unloaded the paper boxes at a private premises in the house of relative’s at Marredpally, Secunderabad without tendering any acknowledgment of receipt of detention of the goods in his custody. Petitioner alleges that this action of the Officer is arbitrary and illegal and he could not have taken physical possession of the goods in such a manner.
- Representation were made by explaining reasons which resulted in expiry of the e-way bill. The Officer received the said letter, but did not acknowledge receipt of the same and did not also release the goods and since it did not seem likely that the Officer would release the goods in spite of submitting explanation for release, it made payment of relevant tax and Penalty, and also submitted a letter. According to petitioner, some of the paper packets in the boxes had also gone missing in the meantime.
- Final order was passed in Form GST MOV-09 mentioning that petitioner admitted that tax and penalty are payable, which is factually incorrect since the petitioner had never admitted the same.
- Further, only after payment of the amount of Tax and Penalty, release order was issued by the Senior Assistant attached to the Office of the Officer. Therefore such impugned order has been passed by the Senior Assistant on behalf of the Original Officer and he is not authorized to pass such an order.
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Contention of the Department |
- It is contended by the Department, that when the checking was done by Officer e-way bill was expired and therefore he was entitled to detain them. Further the drivers of the auto trolleys expressed ignorance of the expiry of the e-way bill.
- It was further contended that the goods were kept in the premises of a known person and due to non-cooperation of the drivers the Officer ensured the safety of the goods under CCTV camera surveillance. Further Representation made by the Tax Paper was ignored because such representation was not applicable in the given case.
- It was further contend that the Original Officer had applied for leave for four days and in his absence, on the request of petitioner, Original Officer directed his Senior Assistant to release the vehicle by signing the release order; and that such release was done in order to ensure that there is no further delay in delivery of goods to the dealer.
- It was also stated that as per the Act, a dealer can extend the validity of an e-way bill in Part-B and the same can be sent even to the driver’s mobile phone, but the dealer willfully did not do so, and expiry of the e-way bill cannot be treated as a technical mistake
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Counter Reply of Tax Payer for the Contention raised by Department |
- The detention notice dt.06-1-2020 is signed by the Assistant Commissioner (C.T.O.), but, the first page of the detention notice mentions the Original Officers name as the first person who intercepted it. Further it is admitted that Original Officer did not sign the release order as he was on leave and there is no provision under the Act to sub-delegate the powers to Other.
- It was stated that the representations given by petitioner in fact show that petitioner never gave consent to pay tax and penalty and therefore Petitioner admitting tax liability in the given case is absured.
- The petitioner also contended that there was no evidence of evasion of tax and pointed out that validity of the e-way bill is different from evasion of tax.
- It was also stated that the Officer could not have kept the goods in his relative’s house, and such a course of action is not permissible under the Act. It was also denied that 6-1-2020 it was a rainy day.
- Petitioner also alleged that withholding of the goods was permissible only for three days under the Act and the Original Officer was duty-bound to bring it to the notice of the Joint Commissioner who allegedly authorized him to detain them, but Officer could not have detained them for more than 16 days; and that such an action is without the authority of law.
- It was also further contended that before issuing release order of the goods, the office of Officer obtained acknowledgment from the driver that they received the entire stock so as to escape liability for loss of goods while they were in custody.
- The petitioner further alleged that for minor mistake of expiry of e-way bill which is beyond the control of Petitioner Company, it cannot levy such tax and penalty particularly when there is no dispute raised by the Officer about the holding of political rally opposing the CAA and NRC at Bashierbagh, Hyderabad on 04-1-2020 resulting in traffic jam.
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Principle Laid down by High Court |
- It was the duty of Officer to consider the explanation offered by petitioner as to why the goods could not have been delivered during the validity of the e-way bill, and instead he is harping on the other facts, is untenable.
- The Officer merely states that there is clear evasion of tax and so he did not consider the said explanations.
- Hence, this is plainly arbitrary and illegal and violates Article 14 of the Constitution of India, because there is no denial by the Officer of the traffic blockage at due to the anti CAA and NRC agitation on 4-1-2020 preventing the movement of auto trolley.
- How the Officer could have drawn an inference that petitioner is evading tax merely because the e-way bill has expired is also nowhere explained in the counter-affidavit.
- In our considered opinion, there was no material before the Officer to come to the conclusion that there was evasion of tax by the petitioner merely on account of lapsing of time mentioned in the e-way bill because even the Officer does not say that there was any evidence of attempt to sell the goods to somebody else on 6-1-2020. On account of non-extension of the validity of the e-way bill by petitioner or the auto trolley driver, no presumption can be drawn that there was an intention to evade tax.
- We are also unable to understand why the goods were kept for safe keeping at Marredpally, Secunderabad in the house of a relative for (16) days and not in any other place designated for such safe keeping by the State.
- In our opinion there has been a blatant abuse of power by collecting tax and penalty from the petitioner both under the CGST and SGST.
- We deprecate the conduct of Officer and his deliberate intention to treat the validity of the expiry on the e-way bill as amounting to evasion of tax without any evidence of such evasion of tax by the petitioner.
- In this view of the matter, the Writ Petition is allowed; the order Passed is set aside. The respondents are directed to refund the said amount collected from petitioner within four (04) weeks with interest@ 6% p.a from 20-1-2020 when the amount was collected from petitioner till date of repayment. The Officer shall also pay costs of Rs. 10,000 to the petitioner in 4 weeks.
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