A.P. Refinery Pvt. Ltd Vs State of Uttarakhand And Others (Uttarakhand High Court)
Conclusion: The Court ordered the release of Vehicle, mango kernel oil, mahua oil, rice bran oil confiscated under section 130 of CGST Act, 2017 as mere suspicion was not sufficient to invoke the provision of the confiscation.
Held: In the present case, assessee-company was transporting Rice Bran Oil from its factory located in Punjab to a dealer , namely M/s S in the State of Uttarakhand. It was transporting the said consignment of Rice Bran Oil through three trucks bearing Registration Nos. In order to transport the consignment, assessee raised three e-Invoices. According to assessee, the moment the e-Invoices were generated on the portal of the department, the transaction immediately got reflected, and accounted for with the department. Moreover, assessee generated e-Way bills from the e-Way portal of the department. These e-Way bills contained cross-references to the e-Invoices which were to expire on 30.03.2021. Since the e-Way bills had expired within three days, the Assistant Commissioner (GST-State), issued three separate orders for physical verification/inspection of the consignment. Upon physical verification, the description on the e-Invoices was found to be matching with the physical goods verified in the vehicle, namely fixed vegetable oils of vegetable grade i.e. mango kernel oil, mahua oil, and rice bran oil. Despite the fact that there was no discrepancy, still the officers ordered the detention of the goods, and of the trucks for further proceedings. According to the department, the show-cause notices were issued ostensibly on the ground that “the e-Way Bills had expired”. It was held that mere suspicion was not sufficient to invoke the provision of the confiscation. Moreover, assessee should be given an opportunity of being heard according to the intent of the Legislature before passing the confiscation order as mentioned in sub-section (4) of Section 130. However, the department had completely failed to show that assessee was indeed, given an opportunity of being heard before the passing the orders of the confiscation in Form GST MOV-11. The confiscation orders passed under Section 130 in Form GST MOV-11, were not found to be passed in accordance with law. Therefore, the impugned orders were liable to be quashed and set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF UTTARAKHAND HIGH COURT
Since both these writ petitions arise from similar set of facts, raise identical legal issues, and seek similar reliefs, the petitions are being decided by this common judgment. The Writ Petition (M/S) No.1014 of 2021 will be leading case.
2. The petitioner, M/s A.P. Refinery Pvt. Ltd., has prayed for the following reliefs before this Court:-
Firstly, it has challenged the constitutional validity of Section 129 of the Central Goods and Services Tax Act/State Goods and Services Tax Act (“CGST/SGST Act” for short), read with Rule 140 of the CGST/SGST Rules.
Secondly, it has also sought a declaration that Section 129 of the CGST Act does not mandate the deposit of tax again, once the tax is already paid.
Thirdly, it has challenged the show-cause notice dated 01.04.2021, passed by the respondent-department under Section 129(3) of the CGST/SGST Act.
Fourthly, it has challenged the legality of different orders, dated NIL, passed by the respondent no. 3 under Section 129(3) of the CGST/SGST Act.
Fifthly, it has challenged the order dated, 01.04.2021, passed by respondent no. 3, for detaining the trucks owned by the petitioner.
Sixthly, it has challenged the rectification/withdrawal orders dated, 23.04.2021, passed by the respondent no. 3 under Rule 142(7) of the CGST/SGST Rules.
Seventhly, it has challenged the order dated 17.04.2021, issued by the respondent No.3 under Section 130 of the CGST/SGST Act. It has also challenged the number of orders, all dated 23.04.2021, issued in Forms GST DRC-07, under Se+ction 130 of the CGST/SGST Act passed by the respondent No.3.
3. Briefly, the facts of the case are that the petitioner, M/s A.P. Refinery Pvt. Ltd, is engaged in the supply of Rice Bran Oil (Grade-II). It is registered with the GST Department, having GSTIN No. 03AAFCA1352B1ZX. It is registered both under the CGST Act, 2017, and under the Punjab Goods and Services Tax Act, 2017.
4. In the present case, the petitioner was transporting Rice Bran Oil from its factory located in Jagraon, Punjab to a dealer, namely M/s Sheel Chand Agroils Pvt. Ltd, located in Lalpur, District Udham Singh Nagar in the State of Uttarakhand. It was transporting the said consignment of Rice Bran Oil through three trucks bearing Registration Nos. HR-45-B-5099, HR-55-M-9073 and RJ-02-GA-9949. In order to transport the consignment, the petitioner raised three e-Invoices bearing numbers 5926/2021, 5934/20-21 and 5930/20-21. According to the petitioner, the moment the e-Invoices were generated on the portal of the respondent-department, the transaction immediately got reflected, and accounted for with the respondent-department. Moreover, the petitioner generated e-Way bills from the e-Way portal of the respondent-department. These e-Way bills contained cross-references to the e-Invoices. These e-Way bills were to expire on 30.03.2021. The truck-wise and invoice-wise details of the e-Way bills are as under :-
