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Gurunanak Arecanut Traders Vs Commissioner (Supreme Court of India)
Summary: The Supreme Court, in Gurunanak Arecanut Traders Vs Commissioner, condoned the delay but declined to interfere with the impugned judgment in exercise of its jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition was accordingly dismissed, and pending applications, if any, were disposed of.Underlying Allahabad High Court ProceedingsThe dispute arose from the detention of 400 bags of Arecanut sold by the petitioner to M/s. Jagdamba Enterprises, Nagpur. The goods, transported from Delhi to Nagpur, were intercepted at Mathura at 4:28 a.m. on 10.06.2022 without an accompanying e-way bill. The e-way bill was generated later the same day at 7:36 a.m. During physical verification, the goods were found to be Chikni Bhuni Supari (processed Arecanut), which the authorities treated as taxable at 18%, whereas the goods had been declared at 5%. A detention order under Section 129(1) of the State Goods and Service Tax Act, 2017 and a subsequent order under Section 129(3) resulted in a tax and penalty demand of Rs.90,62,400/-. The petitioner’s statutory appeal was rejected on 18.08.2022.
Before the Allahabad High Court, the petitioner contended, among other things, that the detention and penalty orders had been passed without an opportunity of hearing; that the e-way bill was generated promptly after the driver realised it was unavailable; and that alleged misclassification could not constitute a basis for detention of goods in transit. Reliance was placed on M/s. Modern Traders vs. State of U.P. and 2 others, 2018 NTN 187, Axpress Logistics India Pvt. Ltd. vs. Union of India and 3 others, 2018 NTN 245, Raj Iron and Building Materials vs. Union of India, 2018 UPTC 217, M/s. Falguni Steels vs. State of U.P. and others, 2024 UPTC 221 and Asharaf Ali K.H. vs. The Assistant State Tax Officer & others, 2021 UPTC 469.
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