Burden of Proof for Double Movement under GST Lies on Department: Allahabad HC

K Y Tobacco Works Pvt Ltd Vs State of U.P. And 4 Others (Allahabad High Court)

The case of K Y Tobacco Works Pvt Ltd Vs State of U.P. and 4 Others before the Allahabad High Court highlights a significant aspect of the Uttar Pradesh Goods and Service Tax (UPGST) Act, 2017. The primary issue revolves around the burden of proof for the alleged double movement of goods based on the same set of documents. This judgment reiterates the responsibility of the tax authorities to provide concrete evidence when accusing a taxpayer of evasion.

Background of the Case

The petitioner, K Y Tobacco Works Pvt Ltd, filed a writ petition challenging the seizure order dated August 13, 2018, the penalty order dated August 14, 2024, and the appellate order dated January 8, 2019. The seizure was based on the claim that the goods were being transported for the second time using the same documents. However, the petitioner contended that all relevant documents, including the invoice and e-way bill, were in order and that the seizure was unjustified.

Arguments Presented

For the Petitioner:

• Counsel Pooja Talwar argued that the driver’s statement, which allegedly indicated the second transport of goods with the same documents, was never provided to the petitioner.
• The critical document MOV-01, containing the driver’s statement, was not made available despite multiple requests.
• Reliance was placed on the judgment of M/s Anandeshwar Traders v. State of U.P., where it was established that the onus to prove double movement lies with the authorities.

For the Respondents:

• The counsel for the respondents attempted to produce a document purportedly containing the driver’s statement, but it was not the official MOV-01 and hence held little evidentiary value.
• The department failed to provide substantial evidence or conduct a thorough inquiry to support their claim of double movement.

Court’s Observations and Judgment