M/S Rateria Laminators PVT.LTD. vs. Additional Commissioner Grade 2 And Another

Held

The Court held that the impugned orders passed by the authorities below could not be sustained in the eye of law. While the goods were intercepted after the expiry of the e-way bills, the authorities failed to record any findings with regard to the explanation provided by the petitioner regarding the driver falling ill and the vehicle breakdown. The Court noted that the appellate authority had merely stated that the explanation was not of an exceptional nature without delving into the specifics. The Court found that the authorities had not recorded any findings with regard to the submissions made by the petitioner. Therefore, the impugned orders dated March 27, 2023, and April 18, 2023, as well as the seizure memo dated March 23, 2023, were quashed. The matter was remitted back to the respondent no. 2 for a reasoned and speaking order after allowing parties to adduce evidence. The Court also noted that the petitioner's argument regarding proceedings under Sections 73, 74, and 75 read with Section 122 of the Act was not raised before the lower authorities.

Facts

The petitioner, M/s Rateria Laminators Pvt. Ltd., a company registered in Kolkata, West Bengal, was transporting goods from Auraiya, Uttar Pradesh, to Jalpaiguri, West Bengal. Two e-way bills were generated on March 6, 2023, valid until March 12, 2023. The goods were intercepted by the Assistant Commissioner, Mobile Squad, on March 13, 2023, and detained on March 23, 2023, due to expired e-way bills. The petitioner explained that the delay was caused by the driver falling ill and a vehicle breakdown. The Assistant Commissioner issued an order under Section 129(3) of the UPGST Act, 2017, proposing penalties. The appeal before the Additional Commissioner Grade-2 (Appeal) was rejected. The petitioner filed a writ petition challenging these orders.

Key Issues

1. Whether the detention of goods and imposition of penalty under Section 129(3) of the UPGST Act, 2017, were justified solely on the ground of expired e-way bills, despite the petitioner's explanation of unforeseen circumstances (driver falling ill and vehicle breakdown)? (Question of mixed law and fact, turning on Section 129(3) and Section 122 of the UPGST Act, 2017). Petitioner's arguments: The detention was based on a technical fault (expired e-way bills) and not on any discrepancy in goods, quality, or quantity. There was no intention to evade tax. The explanation for the delay was due to circumstances beyond their control. If the petitioner did not deposit the penalty, proceedings should have been initiated under Sections 73, 74, and 75 read with Section 122 of the Act, not Section 129(3). Relied on Gobind Tobacco Manufacturing Co. vs. State of U.P. and Assistant Commissioner (ST) vs. Satyam Shivam Papers Pvt. Ltd. Respondent's arguments: The goods were in transit after the expiry of e-way bills, which is a clear contravention of the Act, indicating an intention to evade tax. The explanation provided by the petitioner was without basis, as no material was produced to support the driver's illness or the vehicle breakdown.