M/S Timexo Fasteners INDIA Private LTD. And Another vs. State Of U.P. And 3 Others

Facts

M/s Timexo Fasteners India Private Ltd. (petitioner) purchased fencing wire from Sharp Engineers, Delhi, to be delivered in Kanpur. The goods were dispatched on 5.11.2018 with an e-way bill valid until 12 p.m. on 10.11.2018. The petitioner claimed the vehicle carrying the goods reached Kanpur by 8 p.m. on 10.11.2018, well within the e-way bill's validity period, despite traffic congestion. However, the vehicle was intercepted during the intervening night of 10/11.11.2018. A seizure order under Section 129(1) of the GST Act, 2017, was passed on 11.11.2018, citing the expiry of the e-way bill. Subsequently, an order for release was passed on 12.11.2018, subject to the deposit of tax and penalty. The petitioner challenged the seizure, asserting the e-way bill was valid at the time of interception and that the delay in issuing the seizure memo caused the apparent expiry.

Held

The Court held that the seizure of the goods was not justified. The instructions received from the respondent indicated that the vehicle was checked at 12:30 a.m. on 10/11.11.2018, which was only 30 minutes after the e-way bill's expiry. However, the petitioner's assertion that the vehicle entered Kanpur by 8 p.m. on 10.11.2018, well before the e-way bill's expiry, remained unanswered by the respondent's instructions. The Court noted the discrepancy between the respondent's instructions and another document produced by the Assistant Commissioner regarding the interception time. The Court also observed that the GST Act and Rules do not prescribe a specific time for preparing and issuing a seizure memo, which can be exploited by authorities. Given the unanswered averment of the petitioner regarding the timely entry of the vehicle and the apparent delay in recording the interception time, the Court concluded that the e-way bill was allowed to expire after the detention of the goods. Therefore, the seizure order dated 11.11.2018 was quashed, and the seized goods and vehicle were directed to be released forthwith. No issue was expressly left undecided.

Key Issues

1. Whether the goods were intercepted after the expiry of the e-way bill, making the seizure under Section 129(1) of the Goods and Services Tax Act, 2017, valid? Petitioner's arguments: The petitioner contended that the vehicle carrying the goods reached Kanpur and was intercepted before the e-way bill expired. They argued that the delay in preparing the seizure memo led to the apparent expiry of the e-way bill and that the time of interception was incorrectly recorded. They relied on their categorical statement that the vehicle entered Kanpur at 8 p.m. on 10.11.2018 and was intercepted at the same time. Respondent's arguments: The respondent, through instructions obtained by counsel, stated that the vehicle was checked at 12:30 a.m. on 10/11.11.2018 at Jarib Chowki, Kanpur, by which time the e-way bill had expired. They also produced a document stating the vehicle was intercepted at 8:23 a.m. on 11.11.2018. The instructions did not counter the petitioner's averment about the vehicle's entry time into Kanpur.