Order Date – 19 December 2023

Pareies: M/S K. Anil Jewellers Vs UT of J&K th. Commissioner State Taxes and The Deputy Commissioner, State Taxes, Appeal-I (Appellate Authority) Jammu & ors.

Facts –

• The Petitiner, M/s K. Anil Jewellers, is a firm, dealing in the jewellery business. The vehicle carrying gold ornaments of the petitioner was intercepted on 03.01.2020. On verification it was found that the gold ornaments were accompanied by delivery note which was not a valid document for movement of goods. Also recorded that the said delivery note was found to be untrue in respect of particulars recorded therein.
• Accordingly, the officer detained the said vehicle along with the goods and issued order of detention in Form GST Mov-06. Subsequently, a notice was issued in GST Mov-07 to show cause as to why tax and penalty be not levied on the said goods in terms of Section 129 (1) of the GST Act, 2017. 
• The demand along with penalty was confirmed.

Issue –

• Whether there is a violation of procedure as per GST Circular dated 13.04.2018?

Order –

• The Divisional Bench of Hon’ble High Court observed that from the perusal of the record, it is revealed that the only document the person in charge of the goods produced before the enforcement team at the time of interception, was delivery note which is neither a prescribed document nor a mandatory document.
• A combined reading of the Rule 55 and Rule 138 indicates that the goods which are taken for supply on approval basis can be moved from the place of business of the registered supplier to another place within the same State or to a place outside the State on a delivery challan along with the e-way bill wherever applicable and the invoice may be issued at the time of delivery of goods. From the perusal of aforesaid provisions, it is clear that the same does not provide for any substitute to the prescribed delivery challan.
• The Circular dated 18.10.2017 issued by the Department of Revenue, Central Board of Excise and Customs also indicates that there is no substitute for the prescribed delivery challan. Therefore, non-possession of prescribed delivery challan at the time of seizure of the goods weakens the case of the petitioner.
• The record further reveals that the petitioner had voluntarily agreed in writing to pay tax and penalty as is also evident from the perusal of order passed by the STO. Payment of tax and penalty by the petitioner clearly indicates that the person in charge of the goods was not having a valid delivery challan when the goods were intercepted by the State Taxes Officer.
• Thus the writ petition is dismissed being devoid of any merit.