Order Date – 03 October 2023

Parties: M/S Meera Tent Cloth Supplies Vs Additional Commissioner And 2 Others

Facts –

• The Petitioner, M/S Meera Tent Cloth Supplies, has applied for grant of GSTIN on 29.7.2017 which was approved and GSTIN was issued on 3.8.2017 but the petitioner was unable to login with the provided credentials, consequently another GSTIN was allotted.
• They purchased goods from supplier and on its onward journey the vehicle was intercepted and goods were detained alleging evasion of tax as the GSTIN NO. was not found on the website and it has been cancelled by the department on 30.11.2018. The petitioner was imposed with tax along with penalty.
• Being aggrieved the petitioner filed the writ petition.

Issue –

• Whether the seizure of goods is valid?

Order –

• The Divisional Bench of Hon’ble High Court observed that from the GSTIN no. which is alleged to be cancelled, the petitioner has accessed the portal and downloaded all the relevant forms accompanying the goods in question at the relevant point of time. Once the GSTIN registration of the petitioner was cancelled, the access of the portal cannot be made.
• The genuineness of the e-way bill as well as tax invoice accompanying with the goods in question has not been disputed at any stage. Moreover, it is undisputed that the petitioner has opted for compounding under the Act. Therefore, there could be no availment of input tax credit, intention to evade the payment of tax or wrong availment of input tax credit does not arise at any stage.
• As the petitioner is in compounding, the benefit of input tax credit cannot be availed, hence there cannot be any evasion of tax, if the registration of the petitioner was cancelled on 30.11.2018, the generation of e-way bill, which has not been disputed to be genuine, the seizure cannot be made.
• Hence the writ petition is allowed.