M/S Haryana Freight Carrier (P). LTD. vs. State Of Up And 3 Others

Held

The Court held that the petitioner, being a transport company not registered as a dealer, should deposit the estimated tax liability of Rs.67,010/- for the release of the seized goods and vehicle. The Court noted that the petitioner downloaded a transit declaration Form-1, which was prescribed under the VAT Act and had no role in the transaction covered by the CGST Act, 2017. The seizing authority's conclusion that there were excess goods after physical verification was accepted. The Court directed the release of goods and vehicle upon deposit of Rs.67,010/- and furnishing of an indemnity bond for the penalty amount. The Court did not expressly leave any issue undecided.

Facts

The petitioner, M/S Haryana Freight Carrier (P). Ltd., a transport company, challenges the seizure of goods and vehicle and penalty proceedings initiated under Sections 129(1) and 129(3) of the U.P. Goods & Service Tax Act, 2017. The goods were being transported from Delhi to Jharkhand, belonging to registered dealers in Jharkhand. The petitioner downloaded a transit declaration Form-1 at the U.P. border on 18.03.2018. The vehicle was intercepted on 20.03.2018 by the Assistant Commissioner, State Tax, Mobile Squad Unit-II, Mirzapur. An interception memo was issued, and subsequently, 32 packets of goods, valued at Rs.3,59,220/-, were seized on the grounds that they were not verifiable from the accompanying invoices and goods receipts. A show cause notice was issued proposing a penalty of Rs.67,010/- and tax of Rs.67,010/-.

Key Issues

1. Whether the seizure of goods and vehicle and the initiation of penalty proceedings under Sections 129(1) and 129(3) of the GST Act, 2017, were justified, considering the goods were in transit between States and the petitioner downloaded a transit declaration form prescribed under the VAT Act. Petitioner's contention: The petitioner argued that the goods were in inter-State movement from Delhi to Jharkhand, covered by goods receipts and tax invoices. They contended that the downloaded transit declaration Form-1 was done on wrong advice and had no relevance to the GST Act. They also argued that the goods were verifiable from the documentation. Respondent's contention: The State argued that during physical verification, goods valued at Rs.3,59,220/- were found in excess of what was disclosed, leading to the seizure and penalty proceedings.