Shivaji Udhyog Vs Additional Commissioner Grade-2 Appeal-II (Allahabad High Court)
In the case of Shivaji Udhyog vs. Additional Commissioner Grade-2 Appeal-II, the Allahabad High Court ruled in favor of the petitioner, quashing the GST detention order. The case involved a consignment of R.B. Oil transported from Gwalior to Bihar, which was intercepted in Uttar Pradesh under suspicion that it contained mustard oil instead. The petitioner, a registered firm, had issued a valid e-tax invoice and e-way bill. However, the authorities detained the goods without collecting samples or conducting laboratory tests to verify the claim. The petitioner argued that due process, including issuing notices in MOV-07 and MOV-09, was not followed, rendering the proceedings illegal. The Court found that the tax authorities failed to prove any intention to evade tax, a mandatory condition under Section 129(3) of the GST Act.
The High Court noted that tax authorities cannot arbitrarily classify goods without proper scientific assessment. It ruled that the absence of expert verification and the failure to follow procedural requirements made the detention unlawful. Since no evidence was provided to substantiate the claim that the goods were different from those declared in the documents, the Court quashed the detention and penalty orders. This decision highlights the necessity for tax authorities to follow legal procedures and base their actions on concrete evidence rather than assumptions.
