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TMI Blog2020 (8) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent intercepted the vehicle at Sagar, Shimoga District. On enquiry, the driver of the vehicle furnished the E-way bill and invoice which related to a different consignment of 220 bags of areca by the supplier to the same subject recipient registered at Delhi by a lorry bearing registration No.MH-09-C-4289. Thus, the authorities concerned issued an order dated 07.03.2019 in Form GST MOV-02 (Annexure-B) and seized the truck and the goods by an order of detention in Form GST MOV-06 (Annexure-B1) dated 07.03.2019. A notice under Section 129(3) of the CGST Act in Form GST MOV No.7 (Annexure- B2) dated 07.03.2019 was issued requiring the payment of tax of Rs. 2,12,100/- and penalty of Rs. 2,12,100/-. The petitioner claimed that the e-way bill and the invoice relating to the transport by another vehicle bearing registration number MH-09-C-4289 was handed over to the driver by mistake and that the correct e-way bill along with the invoice showing the payment of the Central Tax by the lorry bearing no. No.HR-55-AF-7882 was furnished before the Tax officials at Shimogga, which was not accepted. Thus, a payment challan and a mandate form for a sum of Rs. 4,24,200-00 towards inter-Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f U.P. and another in Writ Tax No.637/2018 and Balkrishna Steel Traders vs. State of Gujarat reported in (2019) 87 ITPJ (G) 338 and M/s. R.K.Overseas vs. Union of India and three others in Writ Tax No.111/2018 and contended that an order passed under Section 129(3) of the CGST Act is though appealable, yet the Allahabad High Court had released the goods. He also relied upon the judgment in Zebronics India Private Ltd., vs. State of U.P. and others in Writ Tax No.799/2017. He also relied upon the judgment in Jaspreet Kalra Vs. Union of India by the Uttarakhand High Court in (2019) 87 ITPJ (G) 570. He also relied upon the judgment of the Karnataka High Court in the case of Sri Sai Balaji Diggers vs. State of Karnataka in W.P.No.11932/2019 to contend that once the penalty under Section 129(5) of the CGST Act was paid, the proceedings have come to an end. He also relied upon the judgment of this Court in W.P.No.13839/2018 and the judgment in W.P.No.6445/2019. 5. The respondent filed a detailed statement of objections and enclosed therewith elaborate documents. A perusal of the documents enclosed along with the statement of objections would disclose that soon after the vehicle and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax to Assistant Commissioner of Central Tax, Bijapur, stating, "In view of the facts mentioned above, there is a reason to believe that the above mentioned unit may also be fictitious. You are directed to effect seizure of the vehicle along with consignments owned by M/s. Venkataramana Traders under Section 67 of the CGST Act. Further, officers of the Shivamogga Division will be visiting Bijapur to take safe custody of the seized vehicle along with goods". 9. Pursuant thereto, the Superintendent of Central Tax, Sagar Range, Sagar, took custody of the vehicle and consignment on 14.03.2019. 10. Another letter dated 12.03.2019 (Annexure- R16) was addressed by the Commissioner of Central Tax, Mysuru, to the Additional Commissioner, Bengaluru, stating, "....On discreet enquiry made by the officers of Shivamogga Division, it appears that the same is non-existent and fictitious. Further, it is also noticed that the said supplier has carried out outward movement of goods worth Rs. 73 crore till 08.03.2019. As it is seen that the said supplier is a Migrated tax payer under the administration of State Government, it is requested to do necessary physical inspection of the premises and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such trader called M/s. Venkataramana Traders. In view of this suspicion, further verification was conducted with regard to the transactions carried out by M/s. Venkataramana Traders. On further verification made by the officers of Shivamogga Division, it is noticed that the said supplier has carried out outward movement of goods worth Rs. 75 crore till 08.03.2019. It has also come to our notice that M/s. Venkataramana Traders has made transactions with the following assessee: M/s. M.M.Enterprises, Bengaluru. In view of the facts mentioned above, there is a reason to believe that the above mentioned unit may also be fictitious. To ascertain the reality of the transactions as mentioned above, it is requested to cross verify the address of unit mentioned under your jurisdiction i.e., M/s. M.M.Enterprises and the verification report along with spot mahazar in this regard may please be sent for further action at this end." 14. Contemporaneously, another letter dated 12.03.2019 (Annexure-R23) was addressed to the Commissioner of Central Tax, Ahmedabad, in respect of physical inspection of M/s. Pragathi Enterprises with whom the said M/s. Venkataramana Traders had dealt. 15. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either the supplier nor the recipient of the goods and therefore he had no locus standi to file the present writ petition. The learned counsel though did not raise any objection regarding the availability of an alternative remedy in the statement of objection but orally contended that the petition was not maintainable in view of the alternate remedy and also on the ground that the petitioner had not challenged the Order of seizure dated 12.03.2019. 18. The counsel for the petitioner has filed a detailed rejoinder contending that it is a transporter and that it is under a contract of bailment to ensure the transportation of the goods to the destination. Further, as the vehicle belonging to the petitioner is seized along with the goods, the petitioner claimed it has the locus standi to present this writ petition. It contended that the seizure of the vehicles and the goods on 10.03.2019 evidenced by the issuance of GST MOV-2 indicated that it was a seizure under Section 129 of the CGST Act which was not permissible. It contended that the provision of Section 67 of the CGST Act cannot be invoked to seize goods which is in transit and even if it is permissible, then the seizure had to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consignment, the period of thirty days shall not apply and the consignment shall be deemed unclaimed after a period of twenty-four hours of service of notice or any lesser period as may be mutually agreed to by and between the common carrier and the consignor. (2) In the case of an unclaimed consignment under sub-section (1), the common carrier may,- (a) if such consignment is perishable in nature, have the right to sell the consignment; or (b) if such consignment is not perishable in nature, cause a notice to be served upon the consignee or upon the consignor if the consignee is not available, requiring him to remove the goods within a period of fifteen days from the date of receipt of the notice and in case of failure to comply with the notice, the common carrier shall have the right to sell such consignment without any further notice to the consignee or the consignor, as the case may be. (3) The common carrier shall, out of the sale proceeds received under sub-section (2), retain a sum equal to the freight, storage and other charges due including expenses incurred for the sale, and the surplus, if any, from such sale proceeds shall be returned to the consignee or the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of the provisions of the Act or if the alternative remedy is neither efficacious nor practical, this Court cannot shirk its Constitutional duty to ensure a level playing field to a citizen who cannot take on the mighty State. In the present case, having regard to the findings that would follow, this Court holds that in the peculiar facts of this case, this Court is entitled to exercise jurisdiction to set right a palpable illegal proceeding. 24. On careful consideration of the averments made in the writ petition, counter, rejoinder and the arguments advanced, what emerges is that the vehicle and the goods were intercepted at Sagar for the first time for checking the e-way bills, purportedly in exercise of power under Section 68 of the CGST Act. The driver of the vehicle was carrying documents of another consignment and thus there was a mismatch. Thus, the vehicle was searched, the statement of the driver was recorded and the vehicle was detained and a notice under Section 129(3) was issued. The authorized representative appeared before the authorities at Sagar and handed over the correct e-way bill and the corresponding invoice. Yet, the authorities insisted and the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises and furnish a report so as to enable further investigation in the matter. Later, in an effort to unearth the genuinity of the supplies made by the supplier to various entities in Chennai, Ahmedabad, Delhi letters were written to check the registered addresses of the recipients. It was found that the registered supplier was not doing business at the registered address and likewise the recipients were not found doing any business at the registered address. The department therefore sent out letters to freeze the bank account of the proprietor of the supplier and obtained information from the Income tax about the returns filed by him. 27. It is therefore clear that the department has initiated an action under Section 67 of the CGST Act to identify the fraudulent issue of invoice by the supplier to avail input tax credit. The respondent was not able to indicate the status of the enquiry under Section 67 of the CGST Act namely whether it had determined the input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts and or whether it had conducted a scrutiny of the returns filed by the supplier, and as to whether it had con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade outward movement of goods worth Rs. 73,00,00,000-00, then the recipients must have availed the tax credit and this could not have gone unnoticed by the department. This could be attributed to the lackadaisical attitude of the department and the case of the supplier in the instant case should be an eye opener for the State authorities under the Act to ascertain whether the registered establishments are doing business at the registered places and also to take pro active steps for the installation of Radio Frequency Identification devices as this would help the easy tracking of the movement of goods and for verification of e-way bills and the payment of tax etc. Thus, the revenue has to put its house in order and strive to achieve the lofty targets set by the CGST Act by effectively using the tools of audit, inspection, seizure, prosecution, recovery etc. 32. In view of the above and in the facts and circumstances of this case, it is held that in a proceeding under Section 67 of the CGST Act against the supplier, the respondent was not justified in seizing the perishable goods in transit, moreso when the goods had suffered tax and penalty. Hence, this writ petition is allowed and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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