In Writ Tax  No. 1319 of 2018-ALL HC- Information regarding transporter and vehicle has to be provided in Part-B of Form GST EWB-01 before movement of goods; Presumption is raised that goods are in movement when such form is filled: Allahabad HC
Justice Rohit Ranjan Agarwal [27-02-2023]

 

Read Order: M/S Ayann Traders Vs. State Of U.P. And 3 Others 

Tulip Kanth

Prayagraj, March 1, 2023: While observing that there had been a complete misuse of statutory provision of the GST Act and Rules by the assessee, the Allahabad High Court has dismissed a petition of a Pan Masala Dealer in a case where the same Transporting Truck was used for sending different kinds of articles on same document.

The writ petitioner had approached the Bench of Justice Rohit Ranjan Agarwal assailing the order passed by Additional Commissioner, Grade-II (Appeal)- 05, Commercial Tax, Kanpur in proceedings under Section 129(3) of the U.P. Goods and Service Tax Act, 2017.

The petitioner, a registered dealer, had sold 300 bags of Pan Masala valued at Rs.33,81,000 to a dealer at Meghalaya. A tax invoice was generated in 2018 under the Integrated Goods and Service Tax Act, 2017 (IGST Act) charging 28% IGST and 60% Cess on the transaction.

According to the petitioner, the goods were handed over to the transporter for transporting the goods to Meghalaya through a Truck and an E-Way bill was generated on April 8,2018 itself. The transporter, on the same day, also issued a bility for transporting the goods to Meghalaya.

It was the petitioner’s case that the Vehicle was used for transporting fruits and vegetable to West Bengal by Bombay Kolkata Logistics. The vehicle returned to Delhi and again on April 12, 2018 the same vehicle was loaded with rice to be transported to Darbhanga (Bihar) by Hemkunt Logistics through another bility No.

The vehicle then returned on April 17,2018 and was made available to the petitioner for transporting Pan Masala. The goods were intercepted on April 18, 2018 at 3.42 P.M. by the Mobile Squad at Kanpur. The driver had produced tax invoice and bility. The goods were detained and thereafter seizure order was passed and 100% penalty of Rs 33,81,000 along with tax of Rs9,46,680 and Cess of Rs 20,28,600 was imposed. 

Aggrieved by the seizure order, an appeal was preferred by the petitioner which was dismissed by the order impugned, hence, this writ petition was filed.

“Chapter XVI of CGST Rule, 2017 provides for E-Way Rules. According to the same, information regarding transporter and the vehicle has to be provided in Part-B of Form GST EWB-01 before movement of goods. Once, Part-B of Form GST EWB-01 is filled, a presumption is raised that the goods are in movement”, the Bench held.

However, the Bench also added that  if movement of goods has not commenced, the legislature has provided for a way out through Rule 138(9) whereby E-Way which has been generated on the common portal, may be cancelled electronically. 

A safeguard has been provided that it cannot be cancelled if it has been verified in transit in accordance with Rule 138-B. The dealer in the present case had waited for 10 long days and did not cancel the E-Way Bill generated by him on common portal, though the vehicle was not provided by the transporter, the High Court opined.

It was clear to the Bench that vehicle  was not only used by Bombay Kandla Transport (P) Ltd. through which goods were sent by the petitioner-dealer, but also by Bombay Kolkata Logistics for sending fruits and vegetable to Panchkula and by Delhi Hemkunt Logistics for sending rice to Darbhanga (Bihar). 

“Once, the vehicle was not available on 08.04.2018 and was used for transporting fruits and vegetable and its journey commenced on 07.04.2018, the case set up by the petitioner cannot be accepted and has rightly been denied by the authorities”, the Bench held.

Noting that filling the details of the vehicle and transporter in Part-B of Form GST EWB-01 completely belie the story set up by the petitioner before the authorities, the Bench also noticed the finding recorded by the Appellate Authority that Darbhanga Dealer to whom it was alleged that rice was sent had denied such transaction as the firm having already closed down two months prior to the transactions.

This aspect corroborated the facts that through tax invoice and E-Way Bill generated on April 8, 2018, the dealer had made several transactions and evaded tax. The counter affidavit reflecting movement of the vehicle through various Toll Plazas on relevant dates was an establishment of fact that a number of trips were made from Delhi to other places through one and the same document and also through one and the same vehicle.

Thus, the petition was dismissed.