Ashok Kumar Bhatia vs. State Of U.P. And 2 Others

Held

The Court held that for the application of Sections 129 and 130 of the UPGST Act, it is immaterial whether the person proceeded against is a registered person, a supplier, a taxable person, or engaged in business as defined in Section 2 of the Act. It is sufficient if the person is a 'transporter' of goods, the goods are in transit, and have been seized. If the charge is made out against the transporter, the authorities can proceed to seize the goods and the conveyance. The Court found that a show cause notice had been issued to the petitioner, and it was open for the petitioner to file a reply. Therefore, the contention that the petitioner is not doing business in respect of sale or purchase of goods and is only a mere transporter, making the notice bad, was rejected. Regarding the release of the conveyance under Section 129 on payment of a penalty, the Court noted that since the vehicle and goods were seized and an FIR was lodged, it was open for the petitioner to apply to the trial court for release. The Court found no good ground to interfere with the impugned show cause notices and dismissed the writ petitions.

Facts

The petitioners, who are truck owners, challenged notices issued under Section 130 of the U.P. Goods and Services Tax Act, 2017 (UPGST Act). They contended they are merely vehicle owners providing transport services and not involved in the sale or purchase of goods, nor are they registered persons or taxable persons under the Act. The notices were issued in connection with a drive against bogus firms and alleged non-payment of tax on transactions. The petitioners argued that the consignor and consignee had active GST registrations and the authorities should have proceeded against them. They also highlighted that the cancellation of registration for one party was dated after the transaction and showed nil recovery. The revenue argued that the E-way bills were fraudulent, lacked transporter identity, and the petitioners failed to provide contracts showing the details of their services. The revenue also contended that as the transport was inter-state, the Central Goods and Services Tax Act would apply.

Key Issues

1. Whether the impugned notices issued under Section 130 of the UPGST Act, 2017, are bad and without substance against the petitioners, who claim to be mere transporters and not involved in the sale or purchase of goods, or registered/taxable persons under the Act? Petitioner's Arguments: The petitioners argued that as mere vehicle owners providing transport services, they are not liable under Section 130 of the UPGST Act. They are not suppliers, registered persons, or taxable persons as defined in the Act. They contended that the authorities should have proceeded against the consignor and consignee, especially when their GST registrations were active at the time. They also pointed to procedural issues regarding the cancellation of registration and the validity of E-way bills. Revenue's Arguments: The revenue argued that the E-way bills were fraudulent and lacked essential details. They contended that the petitioners failed to provide contracts or sufficient information about the transport services rendered. The revenue also asserted that the nature of the transport (inter-state) meant the Central GST Act would apply, refuting the petitioner's claim that the notice was wrongly issued under the UPGST Act.