In Writ Tax No. 599 of 2023 -ALL HC- Allahabad High Court quashes Tax Authorities' actions against M/s Rateria Laminators Pvt. Ltd. in E-way Bill case; Declares orders & seizure memo as invalid
Justice Piyush Agrawal [16-08-2023]

Read Order: M/s Rateria Laminators Pvt.Ltd v. Additional Commissioner Grade 2 And Another

Chahat Varma

New Delhi, August 23, 2023: The Allahabad High Court has granted relief to M/s Rateria Laminators Pvt. Ltd. (petitioner), by ruling that the actions taken by the tax authorities were not legally justifiable. The Court has subsequently quashed the orders and the seizure memo that were issued by the authorities.

In this case, the petitioner, procured goods from GAIL in Auraiya, Uttar Pradesh, and generated two invoices for the inward supply. The intention was to transport these goods from Auraiya, UP, to Jalpaiguri, West Bengal. For the transportation, two E-way Bills were generated with a validity up to 12th March 2023. However, during the transit, the vehicle transporting the goods encountered issues. The driver of the vehicle fell ill, and there was a breakdown of the vehicle, preventing the timely completion of the journey to Jalpaiguri. The E-way bills expired before the goods could reach their destination. The vehicle carrying the goods was subsequently intercepted on 13th March 2023. On 23rd March 2023, a Form GST MOV01 was created, leading to an order that the goods were being transported without proper documents since the E-way bills had expired. As a result, a Form GST MOV06 was generated, followed by a notice in Form GST MOV07 under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act. The notice proposed imposing penalties of Rs. 11,18,624 under Section 129(1)(a) of the Act and Rs. 36,66,606 under Section 129(1)(b) of the Act. Thereafter, an order under Section 129(3) of the Act was issued, demanding the petitioner to deposit Rs. 11,18,624 to release the detained goods. The petitioner, dissatisfied with this order, appealed before the Additional Commissioner. However, the appeal was rejected. Consequently, the petitioner filed the present writ petition.

The single-judge bench of Justice Piyush Agrawal observed that it was admitted that the petitioner's goods had travelled from Uttar Pradesh to West Bengal, and during this transit, the necessary documents like invoices, E-way bills, and GR were available. However, the point of contention was that the E-way bills had a validity until 12th March 2023, and the interception of the goods occurred on 14th March 2023. The authorities had initiated the proceedings based solely on the reason that the goods were in transit after the E-way bills had expired. No other discrepancies were found in terms of the quality, quantity, or alignment of the goods with the details provided in the invoices.

The bench further noted that the petitioner had provided an explanation in its response, explaining that the delay in transit was due to a breakdown of the vehicle and the illness of the driver. However, the authorities had not provided any valid reasons in their orders to reject or discredit this explanation provided by the petitioner.

Thus, in light of the presented facts, and considering that the authorities at lower levels did not provide any proper reasoning or findings in response to the petitioner's submissions, the bench concluded that the orders and the seizure memo were not legally tenable.