Western Carrier INDIA LTD vs. State Of U.P. And 4 Others

Held

The Court held that the department ought to have considered the petitioner's prayer for release of goods and vehicle upon compliance with the provisions contained in Section 129(1)(a) of the Act. The Court reasoned that the department did not dispute the petitioner's assertion that the goods in transit were carrying necessary documents like the E-Way bill and invoice. Therefore, in view of the Board's Circular dated 31.12.2018, which clarifies that the consigner or consignee should be deemed the owner when such documents accompany the consignment, the petitioner's plea for penalty under Section 129(1)(a) was valid. The Court directed the respondents to act in terms of the circular and release the goods upon compliance with the conditions stipulated under Section 129(1)(a). All other questions were left open to be examined in a statutory appeal. The ratio is that a transporter, carrying goods with proper documentation, should be treated according to the circular regarding ownership for penalty imposition under Section 129, and the department must comply with its own circulars.

Facts

The petitioner, Western Carrier India Ltd., a transporter, is challenging an order dated 14.08.2023 that imposed a penalty under Section 129(1)(b) of the CGST Act, 2017. The petitioner sought the release of seized goods and vehicle by paying penalty under Section 129(1)(a). The petitioner argued that as the goods were accompanied by an E-Way bill and invoice, it should be deemed the owner of the goods as per a Board circular dated 31.12.2018, making Section 129(1)(a) applicable. The State counsel acknowledged that the goods in transit had the requisite documents and did not dispute the applicability of the circular.

Key Issues

1. Whether the petitioner, as a carrier transporting goods accompanied by an E-Way bill and invoice, should be deemed the owner of the goods for the purpose of Section 129(1) of the CGST Act, 2017, in light of the Board's Circular dated 31.12.2018? Petitioner's Arguments: The petitioner contended that the Board's Circular dated 31.12.2018 clarifies that if an invoice or specified document accompanies the consignment, the consigner or consignee should be deemed the owner. As the petitioner was a carrier and the goods had the necessary documentation, the authorities erred in imposing penalty under Section 129(1)(b) instead of invoking Section 129(1)(a). Revenue's Arguments: The State counsel acknowledged that the goods in transit were accompanied by the E-Way bill and invoice and did not dispute the applicability of the circular dated 31.12.2018. The State counsel also noted that the petitioner had a remedy of appeal under Section 107 of the Act for the demand of tax.