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2018 (4) TMI 807

17 there was no requirement of carrying T.D.F. Form-1 in the case of an inter-State supply of goods. In fact on the relevant date there was no prescription of the documents to be carried in this regard under Rule 138 of the C.G.S.T. Act 2017, accordingly, the seizure and penalty imposed upon the petitioners based on the notification dated 21.7.2017 issued under Rule 138 of the U.P.G.S.T. Act 2017, which was not applicable, is clearly illegal. - Cross-empowerment under section 4 of I.G.S.T. Act 2017 and section 6 of C.G.S.T. Act 2017 merely means that State Authorities empowered under the U.P.G.S.T. Act 2017 can also enforce the provisions of C.G.S.T. Act 2017 or I.G.S.T. Act 2017, but it does not mean that they can apply the provisions of U.P.G.S.T. Act 2017 or Rules made thereunder to cases of inter-State trade in violation of section 20(xv) of I.G.S.T. Act 2017. - Petition allowed - decided in favor of petitioner. - Misc. Bench No. 5536 of 2018 - Dated:- 13-4-2018 - Hon'ble Prashant Kumar And Hon'ble Rajan Roy, JJ. For the Petitioner : Pradeeo Agrawal For the Respondent : C.S.C.,A.S.G., Dr Deepti Tripathi ORDER ( Per: Rajan Roy, J. ) Heard Sri Pradeep Agarwal, lea .....

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sued to the truck-driver on the same date. A reply to the said notice was submitted by the Transporter M/s T.V.S. Logistics Service Pvt. Ltd. on 3.1.2018, thereafter, an order under section 129(3) for payment of tax and penalty under clause (b) of section 129(1) was passed by the proper officer. The contention of Sri Pradeep Agarwal, learned counsel for the petitioners was that the petitioner no.1 was retained by M/s T.V.S. Logistics Service Pvt. Ltd. for transporting the goods in question, when the aforesaid incident occurred. The contention was that the transaction was one of inter-State supply of goods, therefore, it was covered by the Integrated Goods and Services Tax Act 2017 (hereinafter referred as ''I.G.S.T. Act 2017') and as per section 20 (xv) thereof, in matters of inspection, search, seizure and arrest, provisions of the Central Goods and Services Tax Act 2017 (hereinafter referred ''C.G.S.T. Act 2017') were applicable. As per section 68 of the C.G.S.T. Act 2017, inter alia, Government may require, the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified, to carry with him such docu .....

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nt any interference by this Court. A process for initiation of a new indirect taxation regime was put into motion by the Constitution (101st Amendment) Act 2016 dated 8.9.2016 by which Articles 246-A, 269-A, 279-A and other provisions of the Constitution were amended. As per the amended Article 269-A, which pertains to levy and collection of Goods and Services Tax in the course of inter-state trade or commerce such tax shall be levied and collected by the Government of India and such tax such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Service Tax council. Import within the territory of India was included within the meaning of the term "Inter-State Trade or Commerce" and in respect of it tax, as aforesaid, would be levied and collected by the Government of India. In pursuance to the aforesaid 101st Amendment of the Constitution three enactments were passed by the Parliament, i.e. the Integrated Goods and Services Tax Act 2017; the Central Goods and Services Tax Act 2017; the Union Territory Goods and Services Tax Act 2017 (hereinafter referred as ''U.T.G.S.T .....

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duce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods." As would be evident from its reading, the documents which the Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified, are such, as may be prescribed. Now this prescription has been made under Rule 138 of the C.G.S.T. Rules 2017 which reads as under: "138. E-way rule Till such time as an E-way bill system is developed and approved by the Council, the Government may, by notification, specify the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage." As would be evident from a reading of the aforesaid rule it refers to an E-way bill System which is to be developed by the G.S.T. Council and it provides for an interim arrangement by the Government till an E-way Bill System is so developed and approved. The words "Government" used therein is defined in section 2(53) of C.G.S.T. Ac .....

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be said that there was any intent to evade tax. As regards the contention of Sri Rahul Shukla, based on the notification issued under Rule 138 of the U.P.G.S.T. Act 2017, no doubt the said notification also takes into consideration the requirement of carrying documents i.e. T.D.F. Form-1, in respect of inter-State movements of goods, but, in our view it is only the Government of India which is empowered to issue such a notification in respect of inter-State trade under section 20(xv) of the I.G.S.T. Act 2017 read with section 68 of the C.G.S.T. Act 2017 and Rule 138 of the C.G.S.T. Rules 2017 made thereunder, as, the term ''Government' used in Rule 138 is defined in section 2(53) of the C.G.S.T. Act 2017 to mean the ''Central Government', just as, under section 2(9) of the I.G.S.T. Act 2017 ''Government' means '' the Central Government'. Moreover, with respect to Goods and Service Tax in relation to inter-State Trade the Parliament alone has the authority to legislate as would be evident from the 101st Amendment to the Constitution. In this view of the matter we are of the considered view that on the relevant date i.e. 17.12.2017 ther .....

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same is not applicable to an inter-State trade or commerce. By virtue of section 20 of the I.G.S.T. Act 2017 it is section 129 of C.G.S.T. Act 2017 that would apply, but this is not the ground on which we are invalidating the impugned action, as, if it is traceable to the aforesaid provision of C.G.S.T. Act 2017 which is pari materia to the State Act, then mere wrong mentioning of a provision would be too technical a ground for interference. We are invalidating the action on account of absence of any notification by the Central Government under Rule 138 of C.G.S.T. Rules 2017 and in view of incorrect application of notification issued by the State Government under Rule 138 of U.P.G.S.T. Rules. We are supported in our view not only by the statement made by Dr. Deepti Tripathi as recorded hereinabove, but also by the judgment of the Kerala High Court on the subject as reported in ASCICS Trading Company v. Assistant State Tax Officer & anr., 2017 NTN (Vol.65) 145, wherein it has been held as under: "3. To a pointed query as to the power of the State Government to detain goods for alleged non compliance with the requirement of carrying the prescribed documents under the I.G.S. .....

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