ABSENCE OF TRANSIT DECLARATION FORM

[Mr. M. GOVINDARAJAN]

Vide Order No. 31 of 2017, dated 21.07.2017 the Governor of Uttar Pradesh specified the documents that a person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage in Uttar Pradesh. Para 4 of the said order prescribes that in case of transportation of taxable goods valuing ₹ 5,000/- or more from a place outside Uttar Pradesh place outside the State, the Form TDF – 1 shall be carried with such good during the transportation of goods or their transit storage within the State and on the exit of goods from the State, the information shall be provided in Form TDF – 2 (Transit Declaration Form).  The said forms shall be downloaded by the procedure prescribed by the Commissioner, State Tax/Commercial Tax from the website of the Department http://comtax.up.nic.in.  Thus while the goods are in transit in UP the Transit Declaration Form is there along with the tax invoice. 

In ‘M/s M.K. Enterprises through its prop. Mukesh Kumar V. State of UP and 3 others’ – 2017 (12) TMI 342 – Allahabad High Court, (decided on 01.12.2017) the petitioner filed this writ petition claiming to transporting ‘panmasala’ from Delhi to Dumka, Jharkhand.  The goods were passing through the State of Uttar Pradesh being a transit State.   The goods were intercepted by the UP Authorities on 27.10.2017 and were detained.  The reason forwarded by the Authorities for such detention was there was no transit declaration form.  The petitioner claims to have filed reply on 27.10.2017.  Along with the reply a copy of its invoice and other documents were annexed.

The seizing authority also compared the IGST and compensation cess paid as disclosed in the tax invoice of the petitioner at the stage of passing the seizure order on 28.10.2017.  The Revenue found apparent discrepancy in the particulars.  In the Copy of tax invoice, dated 25.10.2017 the goods the IGST and the Compensation cess values at Res.17,42,400/- and ₹ 11,88,000/- respectively.  These values have been mentioned at ₹ 5,54,000/-and ₹ 11,88,000/-  in copy of tax invoice dated 25.10.2017 filed along with the reply furnished by the petitioner. 

The Authority noticing the above said discrepancy, without issuing any other or proper notice, passed the seizure order.  In the seized order it has been indicated that there was an intention to evade tax by the petitioner.  Consequently the penalty order has been passed on 31.10.2017.

Against this order the petitioner approached the High Court invoking writ jurisdiction.  The petitioner put forth the following submissions before the High Court-

• The detention and seizure had been made only on account of absence of transit declaration form;
• No other ground had been disclosed to the petitioner at that stage;
• The seizure had been made ex-parte though the movement of goods from Delhi to Jharkhand was otherwise established on record;
• The goods could not have been detained or seized merely because of the transit declaration form has not been found.

The Revenue submitted the following before the High Court-

• At the state of detention there was only one copy of the tax invoice available with the goods;
• The only reason for detention as communicated to the petitioner was absence of transit declaration form;
• The reply filed by the petitioner itself made it clear that tax was sought to be evaded inasmuch as two copies of the computer generated tax invoice cannot record different figures of IGST and compensation cess;
• The seizure order has been correctly passed on the allegation of intention to evade tax for the reason of tax invoice being not genuine.

The High Court considered the arguments of both the sides.  The High Court found that the allegation made in seizure order that the petitioner was not given any opportunity to show cause or give reply to the allegation on which goods have been seized.  The petitioner had no notice or opportunity to explain his conduct with respect to the discrepancy in the tax invoice alleged in the seized order.  The High Court  considered it proper to set aside the orders dated 28.10.2017 and 31.10.2017 passed under section 129(1) and 129(3) of Uttar Pradesh Goods and Services Tax Act, 2017.   The High Court remitted the matter to the respondent No. 4.  The High Court further directed that the petitioner shall treat the seizure order dated 28.10.2017 to be a show cause notice in respect of the charge leveled against it.  The petitioner shall filed the reply thereto before the respondent No. 4 within a period of one week from the date of order (i.e., 01.12.2017).  Upon such reply furnish the respondent No. 4 shall have one week thereafter to pass a fresh order, in accordance with law.  Since there is no allegation against the vehicle in respect to the same may be released in the meanwhile without any security.