Kumar Brothers Vs. Additional Commissioner Grade -2 (Appeal), Commercial Tax, Judicial Division, Basti and Ors. – Allahabad High Court

(2023) taxcode.in 242 HC

IN THE HIGH COURT OF ALLAHABAD

Kumar Brothers
v.
Additional Commissioner Grade -2 (Appeal), Commercial Tax, Judicial Division, Basti and Ors.

Writ Tax No. – 1424 of 2022
Decided on 03-Oct-23

Mr. Justice Piyush Agrawal

Add. Info:

For Appellant(s): Suyash Agarwal

For Respondent(s): C.S.C.

Judgment/Order:

HON’BLE PIYUSH AGRAWAL, J.

1. Heard Mr. Suyash Agrawal for the petitioner and Mr. Rishi Kumar, learned ACSC for State/respondents.

2. The instant Writ Tax is being entertained by this Court in view of the fact that G.S.T. Tribunal is not functional in the State of Uttar Pradesh pursuant to the Gazette notification of the Central Government bearing number CG-DL-E-14092023-248743 dated 14.09.2023.

3. By means of this writ petition, the petitioner is assailing the order dated 21.1.2022 passed by Additional Commissioner, Grade -2 (Appeal) Commercial Tax, Judicial Division Basti, respondent no. 1 and the order dated 11.11.2020 passed by Assistant Commissioner, Commercial Tax, Mobile Squad, Basti, respondent no.2.

4. Brief facts of the case are that petitioner is a proprietorship firm and is registered under AGST (Assam Goods and Services Tax) Act having GSTIN No. 18AEKPM5808E1ZE. The goods in question were sold by the petitioner to M/s Shlok Brothers, Delhi through e-way bill no. 881122952901 generated on 31.10.2020 and G.R. No. 0207 of M/s Nagpur Assam Road lines, Nagpur being Truck No. RJ47 GA 2801. The goods in transit were intercepted on 3.11.2020 at Gorakhpur and thereafter on 11.11.2020 detention order was passed in Form GST MOV-06 on the ground that documents shown by the driver of truck relating to the consignment and both the parties were not verified by the competent officer, therefore, it was found that the goods were transported with intention to evade tax. Thereafter GST MOV07 was issued and order was passed on GST MOV-09 seizing the goods and for its release security as well as penalty was imposed. Against the said order, an appeal has been preferred, which has been rejected by the impugned order. Hence the present writ petition.

5. Learned counsel for the petitioner has submitted that goods in question were transported through Truck No. RJ47 GA2801 and was accompanied with genuine prescribed documents as per the provisions of the Act, however, the authorities in order to harass the petitioner had seized the goods in question. He further submits that the purchaser is registered firm and regularly filing the returns and there is no irregularity in the transaction. He further submits that electronic credit ledger was also brought on record which shows that the purchaser doing its business prior to the date of present purchase and subsequently thereafter but without considering the material on record, the impugned order has been passed illegally. . He prays for allowing the writ petition.

6. Per contra, learned Additional Chief Standing Counsel supported the impugned order and submitted that the proceeding has rightly been initiated and at the time of detention as well as seizure of the goods, the purchaser at Delhi was not doing any business. He further submits that documents filed thereafter is only an afterthought. He prays for dismissal of this writ petition.

7. The Court has perused the records.

8. Admittedly, the goods in question was purchased by M/s Shlok Brothers, Delhi from the petitioner and along with the goods requisite documents as provided under the Act was accompanied and its genuineness was not disputed however after detention of the goods a report was called from the Delhi G.S.T. Authority about genuineness of purchaser ( M/s Shlok Brothers, Delhi) and same was given but at the time of inspection no business activity was found at the disclosed place of firm and on the said basis, the goods were seized and demand as well as security were raised for release of goods. The petitioner has brought on record the various documents which shows that the purchaser was registered dealer and its registration is continuing / functioning.

9. Further the returns have been filed and the electronic credit ledger also shows that the business is being undertaken by the purchaser i.e. M/s Shlok Brothers, Delhi. Once from the material brought on record, it shows that the business were being undertaken by the parties, the appellate as well as assessing authority were not justified in imposing/demanding the security as well as levying penalty under Section 129 (3) of the Act. The appellate authority has rebutted the documents on the ground that it is an afterthought. Once the material have been brought on record copy of which has also been filed as Annexure no. 9, the registration certificate of the purchaser in which at page no. 58 and 59 shows that registration of the purchasing firm is valid and the firm is functional. Further Annexure no. 10 shows that copy of electronic credit ledger has been brought on record for a period of 1.11.2020 to 31.1.2021, where various credits have been mentioned. These facts ought to have been considered by the appellate authority before confirming the impugned order dated 11.11.2020. The documents accompanied with the goods itself shows that the purchaser is involved in the business activity i.e. purchase and sale as per the provisions. Once the purchaser is shown as functional / active the authorities ought not to have pass the impugned order confirming the seizure order dated 11.11.2020.

10. In view of of above, the impugned orders dated 21.1.2022 passed by Additional Commissioner, Grade -2 (Appeal) Commercial Tax, Judicial Division Basti, respondent no. 1 and the order dated 11.11.2020 passed by Assistant Commissioner, Commercial Tax, Mobile Squad, Basti, respondent no.2 are hereby quashed.

11. The writ petition is allowed with all its consequential benefits.

Order Date :- 3.10.2023

Original judgment copy is available here.