GST Authorities Empowered to Detain Goods & Survey Business Premises for Document Verification

Bans Steel Through Its Proprietor Alpana Jain Vs State of U.P. And 2 Others (Allahabad High Court)

In the case of Bans Steel through its Proprietor Alpana Jain vs. State of U.P. and Others, the Allahabad High Court addressed the legality of detaining goods in transit without proper documentation under GST law. The petitioner, a steel distributor, faced a seizure order after their goods were intercepted, lacking an e-way bill for one of the invoices during transportation. The e-way bill was generated after the show cause notice but before the seizure order was passed. The petitioner challenged the order, arguing there was no intent to evade taxes. The Court noted that while the goods were initially without proper documents, the discrepancy was corrected before the seizure order was issued. The Court criticized the GST authorities for not conducting a survey of the petitioner’s business premises to verify the transaction’s legitimacy. It held that once the e-way bill was produced, the petitioner had complied with the law, and the authorities should have taken steps to ascertain the accuracy of the transaction rather than presuming tax evasion. Consequently, the High Court quashed the impugned orders and directed the refund of any amount deposited by the petitioner.