Court Overturns Seizure of Goods in Interstate Transport, Citing Lack of Central Notification

Case Name:

M/S. Delhi Gujrat Fleet Carrier Pvt. Ltd. vs. State of U.P. and 4 Others

Key Takeaways:

The court emphasized the importance of proper notifications for enforcing transit declaration requirements in interstate goods movement.

The judgment highlights the distinction between Central and State government roles in GST implementation.

The case underscores the need for clarity in GST rules and their application to avoid unnecessary seizures and penalties.

Issue:

Was the seizure of goods and vehicle, along with the subsequent penalty notice, valid in the absence of a Central Government notification requiring Transit Declaration Form-I for interstate movement of goods?

Facts:

The petitioner, M/S. Delhi Gujrat Fleet Carrier Pvt. Ltd., is a transporter.

Their goods and vehicle were intercepted by authorities in Agra, Uttar Pradesh on March 19, 2018.

The vehicle was traveling from Nashik, Maharashtra to Faridabad, Haryana.

The Assistant Commissioner Mobile Squad, Unit-10, Agra, issued a seizure order under Section 129(1) of the UPGST Act.

The reason for seizure was the failure to produce Transit Declaration Form-I.

A penalty notice was issued on March 29, 2018, under Section 129(3) of the UPGST Act.

The petitioner appealed to the Additional Commissioner, who affirmed the seizure order on April 13, 2018.

Arguments:

Petitioner's Arguments:

The goods were properly documented with IGST invoice, Goods Receipts, and E-way bill.

Transit Declaration Form-I is not required for interstate transactions.

Despite this, they downloaded TDF-I on March 22, 2018, before the seizure proceedings were completed.

Respondent's Arguments:

The judgment doesn't explicitly state the respondent's arguments, but it's implied that they maintained the necessity of the Transit Declaration Form-I for interstate transport.

Key Legal Precedents:

The court cited Writ Petition No. 583 of 2018 (M/s Ramesh Chand Kannu Mal Vs. State of UP and 2 Others). This case held that due to the absence of a Central Government notification under Rule 138 of CGST Rules, 2017, and incorrect application of the State Government notification under Rule 138 of UPGST Rules, Form TDF-I was not required for interstate movement of goods at the time of the incident.

Judgement:

The court allowed the writ petition, ruling in favor of M/S. Delhi Gujrat Fleet Carrier Pvt. Ltd. The key points of the judgment are:

The goods and vehicle that were seized were ordered to be released immediately.

The consequential penalty proceedings were set aside.

The court based its decision on the precedent set in Writ Petition No. 583 of 2018, finding the facts of the present case to be identical.

FAQs:

Q1: Why was the seizure of goods and vehicle deemed invalid?

A1: The seizure was deemed invalid because there was no Central Government notification requiring Transit Declaration Form-I for interstate movement of goods at the time of the incident.

Q2: What documents did the transporter have that should have been sufficient?

A2: The transporter had IGST invoice, Goods Receipts (GR), and E-way bill, which should have been sufficient for interstate transport.

Q3: Why did the court refer to a previous case in its judgment?

A3: The court referred to Writ Petition No. 583 of 2018 because it dealt with an identical issue and had already established that Form TDF-I was not required for interstate movements in the absence of a Central Government notification.

Q4: What's the significance of this judgment for interstate transporters?

A4: This judgment clarifies that in the absence of proper Central Government notifications, state authorities cannot impose additional documentation requirements like TDF-I for interstate transport of goods.

Q5: Does this judgment apply to all states in India?

A5: While this specific judgment was made by the Allahabad High Court for Uttar Pradesh, it could potentially be cited as a precedent in similar cases in other states.

Heard Sri Anand Kumar Singh, learned counsel for the petitioner and Sri A.C. Tripathi, learned Standing Counsel.

Petitioner is a transporter and is challenging the seizure order dated 19.03.2018 and the consequential notice for levied of penalty dated 29.03.2018 issued under Section 129(3) of the UPGST Act, 2017.

Brief facts of the case are that the goods and vehicle was intercepted by the respondent no. 4 in District Agra, while the same was passing through the State of U.P. on its journey from Nashik, Maharashtra to Fareedabad, Haryana.

According to the learned counsel for the petitioner the goods are duly covered against the IGST invoice, GR (Goods Receipts) as well as E-way bill which was downloaded by the vehicle in-charge from the Government portal. In the aforesaid documents all the requisite details were duly mentioned including the IGST charge @ 18% and 28% respectively.

The Assistant Commissioner Mobile Squad, Unit-10, Agra, who

has intercepted the vehicle on 19.03.2018, has proceeded to

pass the seizure order under Section 129(1) of UPGST Act on

the ground that during the course of verification, the vehicle in-

charge failed to produce the Transit Declaration Form-I.

Learned counsel for the petitioner has submitted that though the

transit declaration form is not required for the transportation of

goods under the inter-state transaction but on insistence by the

respondent no. 4 the person in-charge of the vehicle has

downloaded the TDF-I on 22.03.2018 i.e. before the seizure

proceedings are completed. However the penalty notice is also

issued.

Against the seizure order an appeal was filed by the petitioner

before the Additional Commissioner Grade-2 (Appeal)-III State

Tax, Agra. The Additional Commissioner has affirmed the order

of seizure while dismissing the appeal vide order dated

13.04.2018.

The contention of the learned counsel for the petitioner is that

till date the GST council has not taken any step for

establishment of the GST Tribunal, hence, the petitioner has no

other option but to approach this Court under Article 226 of the

Constitution of India.

We have heard learned counsel for the petitioner and Sri A.C.

Tripathi, learned Standing Counsel.

Almost in identical set of facts this Court has decided a Writ

Petition No. 583 of 2018 (M/s Ramesh Chand Kannu Mal Vs.

State of UP and 2 Others) in which it is held that on account of

absence of any notification by the Central Government under

Rule 138 of CGST Rules, 2017 and in view of incorrect

application of notification issued by the State Government

under Rule, 138 of UPGST Rules, on the date of incident Form

TDF-I or any other Form was not required in the case of inter-

state movements of goods.

Since the facts of the present case are identical of the aforesaid

Writ Petition No. 583 of 2018 M/s Ramesh Chand Kannu Mal

Vs. State of UP (supra), we follow the said decision.

The writ petition is allowed.

The goods and vehicle, which are seized, are directed to be

released forthwith and the consequential penalty proceedings

are also set aside.

Order Date :- 1.5.2018

SK Srivastava

.

(Ashok Kumar,J.) (Krishna Murari,J.)