Shree Radhemani Multitrade Pvt. Ltd. Vs State of Chhattisgarh (Chhattisgarh High Court)
The Chhattisgarh High Court dismissed two writ petitions filed by Shree Radhemani Multitrade Pvt. Ltd. challenging detention orders in FORM GST MOV-06 and subsequent notices in FORM GST MOV-07 concerning two vehicles carrying TMT bars. The petitioner, engaged in trading steel products, argued that a valid e-way bill existed for the original movement of goods within Raipur and that another e-way bill for onward supply to a purchaser in Madhya Pradesh was generated later on 7 February 2025. The vehicles had been intercepted at Dharsiwa, towards Bilaspur, while one vehicle was reportedly parked at a petrol pump after the driver had stopped to rest. The petitioner maintained that the detention was arbitrary and without jurisdiction, relying on decisions concerning premeditated notices, technical e-way bill irregularities and the absence of an intention to evade tax.
The State opposed the petitions on the ground that the proceedings were still at the show-cause stage. It submitted that the competent authority had issued notices under Section 129(3) of the CGST Act, 2017, and had provided an opportunity of hearing. According to the State, no final order under Section 129(3) had been passed, and the petitioner should pursue the statutory procedure rather than seek premature writ intervention. The State also highlighted that the vehicle was intercepted in a direction opposite to the route covered by the original e-way bill and that the subsequent e-way bill concerned transportation to Madhya Pradesh. Reliance was placed on judicial precedents concerning writ maintainability, interference with show-cause notices and the statutory mechanism for detention and release of goods.
Justice Deepak Kumar Tiwari held that the authorities had valid jurisdiction to initiate the proceedings and that issuing a show-cause notice with an opportunity of hearing constituted substantial compliance with natural justice. The Court distinguished the petitioner’s reliance on Assistant Commissioner (ST) Vs Satyam Shivam Papers Pvt. Ltd., which involved traffic blockage, and Falguni Steels Vs State of U.P., which concerned technical problems on the e-way bill portal. Since the factual circumstances differed and the proceedings had not reached final adjudication, the Court found no sufficient ground to entertain either writ petition. Both petitions were dismissed at the motion stage, and the interim applications were disposed of. The Court did not finally determine whether the petitioner had evaded tax.
Cases Discussed
- Siemens Ltd. Vs State of Maharashtra & Others, (2006) 12 SCC 33 (Supreme Court) — Cited by the petitioner regarding writ jurisdiction where a notice is allegedly issued without jurisdiction or with premeditation.
- Assistant Commissioner (ST) & Ors. Vs Satyam Shivam Papers Pvt. Ltd. & Anr., SLP (C) No. 21132/2021, decided on 12 January 2022 (Supreme Court) — Cited by the petitioner; distinguished by the High Court because that case involved traffic blockage.
- M/s Falguni Steels Vs State of U.P. & Others, Writ Tax No. 146 of 2023, decided on 25 January 2024 (Allahabad High Court) — Cited by the petitioner; distinguished because that case involved technical difficulties on the e-way bill portal.
- Whirlpool Corporation Vs Registrar of Trade Marks, Mumbai & Others, (1998) 8 SCC 1 (Supreme Court) — Cited by the State concerning maintainability of writ petitions.
- Commissioner of Central Excise, Haldia Vs Krishna Wax Private Limited, (2020) 12 SCC 572 (Supreme Court) — Cited by the State for the principle that writ petitions should ordinarily not be entertained against mere show-cause notices.
- State of Uttar Pradesh & Others Vs Kay Pan Fragrance Private Limited, (2020) 5 SCC 811 (Supreme Court) — Cited by the State regarding recourse to the statutory mechanism for release of detained or seized goods.
FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT
1. Since similar issue is involved in both the petitions, with the consent of the parties, they are heard analogously and are being decided by this common order.
2. In WPT No.36 of 2025, the petitioner has assailed the detention order under Form GSTMOV-06, dated 8th February, 2025 of vehicle bearing registration No CG-04-NY-1904 and notice dated 13th February, 2025 under FORM GST MOV-07 and all consequential actions of Respondent No.4, being contrary to law. Whereas, in WPT No.37 of 2025, petitioner has assailed the detention order under FORM GST MOV-06 dated 8th February, 2025 of vehicle bearing registration No. CG-04-NX-8413 and notice dated 13.02.2025 issued by Respondent No.4.
3. For the purposes of disposal, facts mentioned in WPT No.36 of 2025 are being referred.
4. Brief facts of the case are that petitioner is engaged in the trading of TMT bars, rods and registered as GSTIN : 22AAECM1143R1ZF and had purchased 19.690 MT of TMT bars of different descriptions from M/s Maa Kudargarhi Steel Pvt. Ltd, Raipur vide invoice dated 7th February, 2025. The said material was to be transported through a truck bearing registration No. CG-04-NY-1904. The subject vehicle had started from seller concerned at 5 am on 07.02.2025 and the same was parked inside Jai Jawan Petrol pump, Dharsiwa towards Bilaspur road since the driver was asleep after refueling the subject vehicle. The authorities intercepted the subject vehicle at 8 am on 07.02.2025 and recorded the statement of driver. Thereafter, an order has been passed under Section 129(1) of the Central Goods and Services Tax Act, 2017 (henceforth “the CGST Act, 2017”) for detention of subject vehicle. Hence this petition.
5. Learned counsel for the petitioner submits that subject vehicle was detained only on the ground that at the relevant time, it was not having E-Way Bill for subsequent sale from Raipur, Chhattisgarh to Madhya Pradesh, though, a valid E-Way Bill was generated after opening of office on 07.02.2025 at 11:24 am which was valid up to 09.02.2025 till 11:59 pm. The said E-Way Bill was generated to supply the said material from petitioner concerned to Patel Traders, GSTIN : 23ANBPP7240D1ZE, Ward No.11, Babatal, Sihora (MP) for an approximate distance of 398 kilometers. Learned counsel further submits that at the time of interception by the authorities, petitioner had already issued a valid E-Way Bill and the same was generated on 07.02.2025 at 01:47 am which was valid upto 08.02.2025 for an approximate distance of 100 kilometers, for delivery of goods to its destination in Raipur itself. Therefore, there is no contravention of the provisions of the CGST Act, 2017 and the authorities in an arbitrary manner, without having any jurisdiction, detained the subject vehicle and the goods. Learned counsel further submits that when any order is passed without jurisdiction and a notice is issued with premeditation, the writ petition is maintainable and for the said proposition, he referred the verdict passed in the matter of Siemens Ltd. v. State of Maharashtra and Others {(2006) 12 SCC 33}. Learned counsel also submits that even in the case of E-Way Bill being expired, the Hon’ble Supreme Court in its order dated 12.01.2022 in the matter of Assistant Commissioner (ST) & ORS. vs. M/S Satyam Shivam Papers Pvt. Limited & Anr. in Special Leave to Appeal (C) No.21132/2021, considered the explanation. Learned counsel further submits that in a tax jurisdiction, only when the tax payer intends to evade tax, it is sine qua non to initiate proceedings for the penalties and there is distinction between technical errors and intentional evasion which is to be recognized for maintaining balance and equitable approach to tax enforcement and for the said proposition, he relied on the judgment dated 25.01.2024 passed in Writ Tax No.146/2023 by the High Court of Judicature at Allahabad in the matter of M/s Falguni Steels vs. State of U.P. and Others. Considering the backdrop, learned counsel prays to admit the writ petition and grant interim relief.
6. On the contrary, learned State counsel would submit that both the writ petitions are pre-mature as only a show-cause notice has been issued and opportunity of hearing was provided to the petitioners in the show-cause notice in terms of Section 129(3) the CGST Act, 2017 and as such, no order has been passed in terms of Section 129(3) the CGST Act, 2017 and issuance of notice falls within the jurisdiction of the authorities. Hence, neither the notice was issued with premeditation nor principles of natural justice has been violated.
7. Learned State counsel further submits that maintainability of writ petition is well settled in a celebrated judgment of Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and Others {(1998) 8 SCC 1}. Learned counsel further submits at that this stage, it is pre-mature for the Court to opine as to whether there was any evasion of tax or not. Hence, entertaining writ petition against show-cause notice is pre-mature and referred to the judgment passed in the matter of Commissioner of Central Excise, Haldia v. Krishna Wax Private Limited {(2020) 12 SCC 572}, wherein at para 15, the Hon’ble Supreme court in categorical terms observed that writ petition should normally not be entertained against mere issuance of show-cause notice.
8. Learned State counsel also places reliance in the matter of State of Uttar Pradesh And others vs. Kay Pan Fragrance Private Limited {(2020) 5 SCC 811} and submits that when in any statute, a complete mechanism is provided for release and disposal of seized goods, the Hon’ble Supreme Court categorically observed in the said verdict that there is no reason why any other indulgence need to be shown to the assessees, who happened to be the owners of the seized goods, they must take recourse to the mechanism already provided for in the Act and the rules, for release. Learned counsel further submits complete mechanism has been provided under the CGST Act, 2017 for Detention, seizure and release of goods and conveyances in transit. Learned counsel further submits that Rule 138 of the CGST Rules, 2017 clearly stipulates that every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees- i) in relation to a supply; or ii) for reasons other than supply; or iii) due to inward supply from an unregistered person, shall, before commencement of such movement, furnish information relating to the said goods as specified in Part A of FORM GST EWB-01, electronically, on the common portal along with such other information as may be required on the common portal and a unique number will be generated on the said portal.
9. Learned State counsel would submit that on reading of the aforesaid provisions, it is explicit that before movement of goods, an E-Way Bill must be generated. She would further submit that in the complete opposite direction i.e. at Dharsiva towards Bilaspur, the subject vehicle was intercepted and even a subsequent E-Way Bill was generated for Madhya Pradesh. Hence, this is not a fit case to entertain the petition.
10. I have heard learned counsel for the parties and considered their rival submissions.
11. It is explicit that after passing of detention order, a show-cause notice has been issued under the statutory provisions and opportunity of hearing was provided to the petitioners, therefore, there is substantial compliance of natural justice and the authorities were having valid jurisdiction as the subject vehicle was intercepted at Dharsiva, towards Bilaspur, which is just the opposite direction of the route for which an E-Way Bill was generated and a subsequent E-Way Bill was generated for the State of Madhya Pradesh.
12. The Case laws referred by learned counsel for the petitioners are distinguishable on facts. In the matter of M/S Satyam Shivam (supra), there is reason of traffic blockage and in the matter of M/s Falguni Steels (supra), there are some technical issues on the portal of the competent authorities for issuing an E-Way Bill.
13. For the foregoing, this Court does not find any good ground to entertain the writ petition.
14. Accordingly, both the Writ Petitions are dismissed at the motion stage itself.
15. Consequently, all interim applications also stand disposed of.
