State Of U.P. Thru. Secy. Institutional Finance And Ors. vs. M/S Maa Vindhyavasini Tobacco PVT. LTD. Kanpur Thru. Dir.

Held

The Court held that the petitioner's argument regarding the goods being transported twice on the same invoices was not worthy of acceptance. The Court noted that E-way bills are required under Section 138 of the CGST Act rules, and the alleged issue of using the same E-way bills twice did not emerge in the assessment order, nor was there a basis for the appellate authority to reach such a conclusion. The Court affirmed that the appellate authority rightly allowed the appeal and directed the release of goods and the transport vehicle. The Court further clarified that Section 129 provides an alternate mode for assessees to get their goods released by paying specified amounts. If the assessee does not avail this benefit, the department can proceed under Chapter 15 read with Section 122 of the CGST Act. Since the respondent did not approach for the benefit under Section 129 and the appellate authority found the basis for proceedings to be non-existent, the Court found no reason to interfere with the appellate authority's order.

Facts

The State of U.P. (Petitioner) filed a writ petition challenging an order dated 22.06.2019 passed by the appellate authority. This order had set aside a demand of tax and penalty of Rs.7,23,699/- and Rs.19,05,024/- respectively, imposed on M/s Maa Vindhyavasini Tobacco Pvt. Ltd. (Respondent) under Section 129(3) of the CGST Act. The goods being transported by the respondent were intercepted on 28.04.2019 based on intelligence that they were being transported using pre-used tax invoices. The driver's statement was recorded, and subsequently, the order under Section 129(3) was passed. The appellate authority found no material to justify the detention and seizure of goods, stating that tax and penalty cannot be based on presumption.

Key Issues

1. Whether the appellate authority erred in setting aside the demand of tax and penalty imposed under Section 129(3) of the CGST Act, despite the petitioner's contention of goods being transported twice on the same invoices? (Question of law and fact, concerning Section 129(3) and Section 138 of the CGST Act). Petitioner's arguments: The petitioners received intelligence that the goods were being transported twice on the same set of invoices. They argued that the E-way bills should have been used, and the fact that they were allegedly used twice was a basis for interception. Respondent's arguments: The respondent did not explicitly argue in the judgment, but the appellate authority's decision, which the respondent supported, was that there was no material available with the authorities for detention and seizure, and that levy of tax and penalty cannot be based on presumption. The respondent also did not approach for availing the benefit of release under Section 129.