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TMI Blog2018 (11) TMI 1344X X X X Extracts X X X X X X X X Extracts X X X X ..... tion? And can we treat the car, sought to be transported without an eway bill, as an item of "used personal and household effects"? Facts: 3. KUN Motors, the first petitioner, a company with a branch in Pondicherry, deals in luxury cars; Vishnu Mohan, the second petitioner, a resident of Trivandrum, purchased a car-Mini Cooper S Hatch-from KUN Motors ("the Company"). On 23 August 2018, the Company raised the Exhibit P1 invoice and sold the vehicle to Mohan. Then Mohan had the vehicle temporarily registered in Pondicherry on 27 August 2018, as seen from Exts.P2 and P2 (a). Mohan wanted the car transported to Trivandrum, where he intends to use it. So he requested the Company to transport the vehicle. Responding to Mohan's request, the Company raised Exhibit P3 invoice, collected the transport charges, paid the IGST, and then dispatched the vehicle through its lorry to Trivandrum. 4. But en route, on 28 August 2018, the Assistant State Tax Officer, the first Respondent, intercepted the vehicle at Amaravila and detained it, invoking Section 129 of the KSGST Act. When the officer detained the consignment, he took a statement from the lorry driver and also passed a formal order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wants the Court to let Mohan have the car released by his providing a personal bond, rather than bank guarantee. Respondents': 10. Dr. Thushara James, the learned Government Pleader, has strongly countered Sri Menon's submissions on all counts. She has contended that the Ext.P1 tax invoice unmistakably shows that the sale is an inter-state transaction. Had it been a simple intra-state sale, and with no inter-state impact, she also argues, the Company would not have paid IGST. 11. Dr. James has taken me through various statutory provisions, including Section 129 and Rule 55A, as well as Rule 138, to refute the petitioners' contentions that the goods ought not to have been detained. According to her, the statutory mandate is clear, and it admits of no adjudicatory discretion-say, to scale down either the tax or penalty, as an interim measure. She has also attacked the petitioners' defence that the car being transported is a used vehicle. She maintains that a used vehicle must have had a prior owner. Here, the Company sold the car, paid the IGST, and sought to deliver the vehicle at its destination. Dr. James, in that context, asserts that the Company could not have completed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carry a different rate. Clause (c) of Section 129 permits the consignor or the other party to furnish a security equivalent to the amount payable under clause (a) or clause (b) "in such form and manner as may be prescribed." The proviso to Section 129 ensures the principles of natural justice: there will be no detention or seizure without the officer's serving an order on the person transporting the goods. 16. And after considering the aggrieved person's objections under subsection (4), the officer passes another order, under subsection (3), specifying the tax and penalty payable under clauses (a), (b), or (c). Once the consignor or any other person pays the amount referred to in sub-section (1), all detention or seizure proceedings must stand concluded. 17. If the person concerned fails to pay the tax and penalty under sub-section (1) within seven days from detention or seizure, the officer will initiate further proceedings under Section 130 of the Act. 18. For us, sub-section (2) is vital; it refers to sub-section (6) of Section 67. For interim custody, say, of goods and vehicle, the procedure laid down under Section 67 (6) will apply. So we will examine that provision. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bill on the same portal, based on the information the registered person has provided in Part A of FORM GST EWB-01. 24. The second proviso to subrule (3) mandates that if an unregistered person transports the goods either by his own conveyance or by a hired one, or transports through a transporter, he or the transporter may generate the e-way bill in FORM GST EWB-01 on the common portal. In the same breath, we will examine subrule (14), too. It enlists the occasions when "no e-way bill is required to be generated." Clause (a) of this sub-rule exempts the goods specified in Annexure from the requirement of e-way bill. And item 7 of the annexure reads thus: used personal and household effects. Indeed, the petitioners contend that what was transported is a car, and that car is a used personal item. 25. Now we may as well examine Rule 55A of the Rules. If the law compels no person in charge of the conveyance to carry an e-way bill, Rule 55A sets out what other documents that person should carry along with the goods: a copy of the tax invoice or the bill of supply issued under Rules 46, 46A, or 49. 26. So the petitioners maintain that the statute itself contemplates the circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory and the precedential positions, has observed that sub-section (3) of section 55 particularly speaks of a declaration as specified in Rule 138. When goods are transported on a delivery challan, instead of an invoice; that violates the Act and the Rules. The Division Bench did not agree with the learned Single Judge's view that the Department accepted the genuineness of the delivery challan. A delivery challan under section 55, it observes, is not one issued by the Department but is one "prepared by the assessee, who is only obliged to maintain it serially numbered. It does not lie in the detaining officer's mouth to suspect the genuineness of the delivery challan when the consignor swears by it." The Division Bench, in fact, observed that non-taxable nature of the transaction would be justified under the Rules only if the party declares according to Section 138. It held: "[o]nly when there is a declaration uploaded in Form KER-1the transaction, which is non-taxable, would be intimated to the Department and available in its site. If not, there could definitely be a sale effected without an invoice; if the delivery challan goes undetected, resulting in evasion of tax." 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 138 stipulates that if an unregistered person transports the goods either by his own conveyance or by a hired one, or transports through a transporter, he or the transporter may generate the e-way bill in FORM GST EWB-01 on the common portal. And sub-rule (14) of Rule 138 enlists the occasions when "no e-way bill is required to be generated." The goods specified in Annexure stand exempted from the requirement of the e-way bill. And item 7 of the annexure covers used personal and household effects. To apply Rule 55A, which lets the person in charge of goods to carry other documents than the eway bill, first we must ensure that Rule 55A applies. To have it applied, we must also steer clear of the mandatory requirements of Rule 138. 34. True, Mohan is an unregistered person getting his car transported. He can transport the car "either by his own conveyance or by a hired one". He may transport it through a transporter. That he did. In that event, he or the transporter may generate the e-way bill in FORM GST EWB-01 on the common portal. But the question is, does the Ext.P3 invoice, coupled with the Ext.P1 Tax Invoice, leads us to conclude that the purchase of the car was, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutory mandate under section 129 of the GST Act admit of any discretion to let the affected party pay a reduced amount of tax and penalty pending further adjudication, for having the interim custody of the detained goods? 39. But the Division Bench in Indus Towers has held that "if the conditions under the Act and Rules are not complied with, definitely Section 129 operates and confiscation would be attracted. The respondents are entitled to adjudication, but they would have to prove that" the goods being transported stand exempted from the rigours of the GST regime. 40. Under these circumstances, I fail to persuade myself that I can take a different course from what has been judicially mandated in Indus Towers, for that case-holding squarely binds me. As a matter of abundant caution, I reiterate that I have not touched on the merits; nor should the authorities construe this judgment as expressing any view on the petitioners' claims and contentions. The matter, as I have observed, concerns, interim custody of the goods. Section 129 and other provisions of the Act the Rules prescribe the procedure for that purpose. The petitioners can follow that procedure and secure the interim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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