Order Date – 27 February 2023

Parties: M/S Ayann Traders Vs State Of U.P. And 3 Others

Facts –

• The Petitioner, M/S Ayann Traders, claims that it generated E-way bills and tax invoices on 08.04.2018 and handed over the goods to the transporter and on the same day the transporter also issued a bility for transporting the goods to Meghalaya. But goods were transported only on 17/18.04.2018 due to non availability of vehicle.
• The goods were intercepted on 18.04.2018 by the Mobile Squad at Kanpur. At the time of interception of goods, the driver had produced tax invoice and bility. The goods were detained and thereafter seizure order was passed on 01.05.2018 and 100% penalty along with tax and cess.

Issue –

• Whether the detention of goods is valid after providing all the necessary documents?

Order –

• The Single Bench of Hon’ble High Court observed that it is clear that the goods were sent on 07.04.2018 to West Bengal through the vehicle in question and thereafter, on 12.04.2018 to Darbhanga (Bihar). Filling the details of the vehicle and transporter in Part-B of Form GST EWB-01 completely belie the story set up by the petitioner before the authorities.
• Chapter XVI of CGST Rule, 2017 provides for E-Way Rules. According to the same, information regarding transporter and the vehicle has to be provided in Part-B of Form GST EWB-01 before movement of goods. Once, Part-B of Form GST EWB-01 is filled, a presumption is raised that the goods are in movement. However, if movement of goods has not commenced, the legislature has provided for a way out through Rule 138(9) whereby E-Way which has been generated on the common portal, may be cancelled electronically. A safeguard has been provided that it cannot be cancelled if it has been verified in transit in accordance with Rule 138-B. The dealer in the resent case had waited for 10 long days and did not cancel the E-Way Bill generated by him on common portal, though, the vehicle was not provided by the transporter.
• Moreover, from the finding recorded by the Appellate Authority it is evident that through tax invoice and E-Way Bill generated on 08.04.2018, the dealer has made several transactions and evaded tax. Also the counter affidavit reflects movement of the vehicle through various Toll Plazas on relevant dates and is an establishment of fact that number of trips were made from Delhi to other places through one and the same document and also through one and the same vehicle.
• There has been a complete misuse of statutory provision of the Act and Rules by the dealer. The inference drawn by the taxing authorities after interception of goods on 18.04.2018 needs no interference.