D And D Construction And Developers Company Vs Additional Commissioner And 2 Others (Allahabad High Court)
The Allahabad High Court has ruled that the transfer of an old machine by a construction company from its head office in Rajasthan to its branch in Uttar Pradesh for its own use does not constitute tax evasion under the Goods and Services Tax (GST) law. The court quashed penalty orders imposed on D And D Construction And Developers Company, emphasizing that such a transaction, without any element of sale or proven intent to evade tax, should not attract proceedings under Section 129 of the CGST Act.
The case, decided jointly in two writ petitions, arose when a truck transporting an old compactor machine belonging to D And D Construction And Developers Company was intercepted on March 16, 2020, in Uttar Pradesh. The company, with its head office in Jodhpur, Rajasthan (GSTIN 08AFEPT3780M1ZS), was moving the machine to its branch location in Auraiya, Uttar Pradesh, for use in an earthwork project related to the Bundelkhand Expressway development.
Upon interception, the vehicle was initially found to be transporting the goods without an invoice/bilty and an E-way Bill. Although the petitioner subsequently produced a delivery challan dated March 17, 2020, and an E-way Bill before the seizure and penalty orders were formally issued, the authorities proceeded with action under Section 129 of the CGST Act, leading to the imposition of a penalty. The company’s appeal against the penalty order was subsequently dismissed by the Additional Commissioner.
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