Pratik Enterprises Vs. Principal Commissioner, CGST and Central Excise (Headquarters) and Ors. – Jharkhand High Court

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(2025) taxcode.in 432 HC

IN THE HIGH COURT OF JHARKHAND

Pratik Enterprises
v.
Principal Commissioner, CGST and Central Excise (Headquarters) and Ors.

W.P.(T) No. 3471 of 2025
Decided on 25-Jul-25

Mr. Justice Tarlok Singh Chauhan (Chief Justice) and Mr. Justice Sujit Narayan Prasad

Add. Info:

For Appellant(s): Mr. Arup Dasgupta, Advocate, Ms. Amrita Singh, Advocate and Mr. Yashdeep Kanhai, Advocate

For Respondent(s): Mr. P.A.S. Pati, Advocate

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Judgment/Order:

02/Dated: 25.07.2025

Tarlok Singh Chauhan, C.J.(Oral)

1. The instant civil writ application has been filed for grant of following reliefs:

(i) For the issuance of an appropriate writ/order/ direction or a writ in the nature of certiorari quashing and setting aside the order dated 17.3.2025 passed in GST MOV-09 under Section 129(3) of the Central Goods and Services Tax Act, 2017 (“the Act”), whereby penalty of Rs. 3,43,075/- has been levied, specifically for the reason that the said order fails to prove any intent to evade on part of the Petitioner and further because all requisite documents for conveyance of the goods were admittedly available with the petitioner.

(ii) For the issuance of an appropriate writ/ order/ direction or a writ in the nature of mandamus directing the Respondents to refund a sum of Rs. 3,43,075/- along with interest to the petitioner as the demand for penalty is completely arbitrary, illegal and unreasonable.

2. The undisputed facts leading to filing of the present writ application is that the goods of the petitioner which were in transit was inspected under the provision of sub-section (3) of section 68 of the Central Goods and Services Tax Act, 2017 and sub section (1) of section 129 of CGST Act, 2017 read with sub section (3) of section 68 of the State/Union Territory Goods and Services Tax Act, 2017 on 09.03.2025 and the following discrepancies were noticed.

(a) Loading point of the goods loaded in said vehicle was found to be different as declared in E- Way Bill and as per the statement of the driver and GPS location shared by the transporter/driver resulting violation of Rule 138 of CGST Rules, 2017.

(b)The Supplier of the loaded goods i.e. the petitioner had declared 27 additional places of business and to be in primary business of Pet Bottle Scrap.

3. It is the case of the respondent that as per intelligence, the modus operandi of the petitioner was to purchase the pet bottle scrap from local/un-registered persons and store the same at 27 additional places of business and thereafter to supply the pet bottle scrape to different purchaser from the said places of business. In the whole process of its business activities, there was no occasion to avail and utilize Input Tax Credit but the petitioner had been claiming huge input tax credit for payment of GST only to avoid the payment of GST. Further, during the course of verification, it was noticed that the said supplier had declared inwards/purchases which appears to be fake or not related in furtherance of its business and only meant for availing irregular Input Tax Credit during the Financial Year 2023-2024 & 2024-2025, which are as under:

4. Further, it was noticed that the petitioner had availed and utilized ITC amounting to Rs. 1.01 Crore in Financial Year 2023-2024 and Rs. 1.03 Crore in Financial Year 2024-2025 which did not appear to be proper and appeared to be fake/suspicious as most of the suppliers of the petitioner was suspended/cancelled and also registered in other items which are not related to the furtherance of business resulting in contravention of section 16 of the CGST Act, which required proper investigation.

5. It was for this precise reason that the goods and the conveyance used for the movement of goods were detained by the respondents and accordingly notice in FORM GST MOV 07 dated 12.03.2025 was issued to the person in charge/driver of the said vehicle.

6. The petitioner replied to the same, vide reply dated 17.03.2025, wherein it is submitted that before dispatch of the said goods, (one) e-Tax Invoice bearing No. 1126 (IRN:-8ada38572fb1f512917c674d3 fed241c74e013c2b47f3480febdfc673ccc7750) dated 08.03.2025 had been generated from the GST Portal and an E-Way Bill was also generated from the portal bearing number-871506739013 dated 08.03.2025 having validity upto 16.03.2025 at 03:40 PM for covering a distance of 1485 KM. The said goods were dispatched through vehicle No. HR-38X-1195 belonging to M/s. Rajasthan Haryana Road lines. The vehicle was intercepted on 09.03.2025 around 02:30 PM by the Assistant Commissioner (Prev.) of CGST&CX ( Hqrs.), Ranchi as there was huge accumulation of Input Tax Credit in the ITC Credit ledger of the petitioner and the goods had been purchased from mostly unregistered persons or from suppliers whose GST Registration Certificate had either been cancelled or had been suspended and the noticee had availed and utilized ITC to the tune of Rs. 1.01 Crore and Rs. 1.03 Crore as mentioned above that on fake invoices during financial year 2023-2024 and 2024-2025. Accordingly, penalty under section 129(1)(a) and 129(1)(b) of the CGST Act, amounting to Rs. 3,43,075/- and Rs. 9,52,985/- were imposed for the violation of Rule 138 of the CGST Rules,2017.

7. However, in the reply filed by the petitioner it was averred that in order to invoke the provisions of Section 129(1)(a) or section 129(1)(b) there should be violation of Rule 138 of the CGST Rules, 2017. In the instant case there was no violation as the noticee before movement of its goods from its warehouse located at Village-Sakui, Kharagpur, District-Pashim Medinipur, West Bengal had generated the e-Invoice and E-Way Bill from the Common portal and the driver of the said vehicle was carrying with him both the e-Invoice and E-Way Bill along with the consignment Note bearing number:-9201 dated 08.03.2025 issued by the Rajasthan Haryana Roadlines and weighment slip bearing no. 44692 dated 08.03.2025 issued by Maa Kali Weigh Bridge. This is the precise contention raised even in this petition while assailing the order passed by the respondents.

8. We have heard the learned counsel for the petitioner and have gone through the documents placed on record and find that no doubt the petitioner had generated the e-Invoice and E-Way Bill from the common portal but the loading point of the goods located in the said vehicle has been found to be different from the one declared in the E-Way Bill and the same has been corroborated by the statement of the driver as well as the GPS location shared by the transporter/driver. The actual loading point of the said goods has been found to be Rupnarayanpur, West Medinipur, West Bengal as per the GPS location shared by the transporter/driver which is different from the place of dispatch mentioned in E-Way Bill i.e. Village-Sakui, Post:- Matkatpur, Kharagpur, District:-Pashim Medinipur, West Bengal. Further, as per the GPS location, the said vehicle also stayed about six hours on 08.03.2025 at Rupnarayanpur, West Medinipur, West Bengal from 08:46 AM to 14:50 PM which confirms the goods were loaded at this location which is different as per E-Way Bill resulting in violation of Rule 138 of GST Rules, 2017. Not only this, the petitioner did not assail the action of the respondents and paid the penalty amount and got the goods and conveyances released. Such deposit was made without any protest.

9. We are conscious of the fact that the petitioner even by election cannot be treated to have waived his right or acquiescenced to the demand by paying the amount in question, but given the fact that the adjudicating authority was adequately armed with material adverse to the petitioner, we have no doubt in our mind that the instant petition is clearly an afterthought besides being devoid of any merit.

10. Accordingly, for the reasons stated above, we find no merit in this petition and the same is dismissed, in limine.

(Tarlok Singh Chauhan, C.J.)

(Sujit Narayan Prasad, J.)

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Original judgment copy is available here.