Mane Kancor Ingredients Pvt. Ltd. Vs State Tax Officer (FAC) (Madras High Court)
Goods seized for not accompanying delivery challan: HC directs release on production of relevant delivery challans
In a significant ruling, the Madras High Court has directed the release of goods seized from Mane Kancor Ingredients Pvt. Ltd. The case involves the detention of goods and imposition of penalties due to the absence of delivery challans during transportation. This decision underscores the importance of adhering to documentation requirements under the GST regime and clarifies the conditions under which goods can be transported without accompanying delivery challans.
Background
Mane Kancor Ingredients Pvt. Ltd., a prominent supplier of natural food ingredient solutions, encountered legal challenges when their goods were detained by the State Tax Officer (FAC). The detention occurred on 21.05.2024, while transporting 16 metric tonnes of ‘Oleoresin Paprika Crude’ from Chennai Sea Customs Port to their Karnataka unit. The impugned order, dated 27.05.2024, cited the absence of delivery challans as the primary reason for detention and imposed penalties on the company.
Petitioner’s Argument
The petitioner, Mane Kancor Ingredients Pvt. Ltd., argued that the transportation of goods was compliant with existing GST regulations. They provided several key documents to support their case:
- Advance Authorisation Certificate: This certificate specified the Karnataka unit as an authorized destination for the transported goods.
- GST Registration Certificate: This document listed the Karnataka unit as an additional place of business, thereby legitimizing the transportation route.
- E-Way Bill: The bill clearly indicated the shipment’s origin, destination, and the details of the exporter and importer.
The petitioner’s counsel highlighted a circular issued by the Central Board of Indirect Taxes and Customs (CBIC) on 26.03.2018. According to paragraph 8.4 of this circular, delivery challans are mandatory when goods are dispatched directly by the principal to a job worker. However, the petitioner contended that since the goods were transported directly to a job worker, the absence of a delivery challan should not be grounds for detention.
