Neither State Legislature nor State Government have power to make laws/rules to govern interstate movements of goods in course of trade, and for purposes of levy of tax, so detention order passed for sole reason that transportation is not accompanied by prescribed documents under the IGST Act/CGST Act/CGST Rules, cannot be legally sustained.

Neither State Legislature nor State Government have power to make laws/rules to govern interstate movements of goods in course of trade, and for purposes of levy of tax, so detention order passed for sole reason that transportation is not accompanied by prescribed documents under the IGST Act/CGST Act/CGST Rules, cannot be legally sustained.

Goods & Services Tax
M/S. ASCICS TRADING COMPANY vs. THE ASSISTANT STATE TAX OFFICER - (GST HC CASE)

Assessee Detention of Goods—Power of the State Government—State Govt issued notice and passed order for detention of goods holding that transportation was not accompanied by prescribed documents under the IGST Act/CGST Act/CGST Rules—Assessee’s case was that State Government had no power to detain goods for alleged non-compliance withrequirement of carrying prescribed documents under IGS—Held, provisions of Section 4 and Section 20 of the IGST Act and Section 6 of the CGST Act read with Rule 138 of the CGST Rules amended by notification No.27/2017 - Central Tax pointed out that, although power to prescribe documents that were to accompany transportation of goods in course of interstate trade was conferred on Central Government, Central Government had till date, not notified documents that have to be carried by a transporter of goods in course of interstate movement—Under said circumstances,and finding that neither State Legislature nor State Government would have power to make laws/rules to govern interstate movements of goods in course of trade, and for the purposes of levy of tax, High Court held that detention for the sole reason that transportation was not accompanied by prescribed documents under the IGST Act/CGST Act/CGST Rules, could not be legally sustained—Assessee’s petition dismissed.

1. It is brought to my notice by the learned counsel appearing for the petitioner that pursuant to the interim order dated 28.09.2017, the goods belonging to the petitioner, as also the vehicle carrying the goods, were released on a production of the interim order before the respondent.


2. I have heard the learned counsel for the petitioner as also the learned Special Government Pleader for the respondents.


3. To a pointed query as to the power of the State Government to detain goods for alleged non compliance with the requirement of carrying the prescribed documents under the IGST Act, which is the basis for the detention in Ext.P5 notice impugned in the writ petition, the learned Government Pleader would take me through the provisions of the IGST Act, CGST Act and SGST Act and in particular, the provisions of Section 4 and Section 20 of the IGST Act and Section 6 of the CGST Act read with Rule 138 of the CGST Rules as amended by notification No.27/2017 - Central Tax for the purposes of pointing out that, although the power to prescribe the documents that are to accompany the transportation of goods in the course of interstate trade is conferred on the Central Government, the Central Government has, till date, not notified the documents that have to be carried by a transporter of the goods in the course of interstate movement. Under the said circumstances, and finding that neither the State Legislature nor the State Government would have the power to make laws/rules to govern interstate movements of goods in the course of trade, and for the purposes of levy of tax, I am of the view that detention in Ext.P5, for the sole reason that the transportation was not accompanied by the prescribed documents under the IGST Act/CGST Act/CGST Rules, cannot be legally sustained. I therefore, allow the writ petition by making the interim order absolute.


Sd/-


A.K.JAYASANKARAN NAMBIAR


JUDGE



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