Earth Minerals Vs State of U.P. And 2 Others (Allahabad High Court)
Factual Background
Earth Minerals was awarded a works contract by SBCC Buildcon Private Limited on May 1, 2025, for executing embankment works on the 6-lane Greenfield Varanasi-Ranchi-Kolkata Highway in Bihar under the Bharatmala Pariyojana. The contract necessitated the transfer of a Motor Grader (a capital asset and ‘goods on wheels’) from its unit in Rajasthan to the project site in Bihar for self-use.
During its journey, the vehicle was intercepted by the tax authorities in Uttar Pradesh. An initial discrepancy was noted in the transporter’s ‘bilty’ (consignment note), which mentioned the wrong vehicle registration number (RJ01GC1474 instead of RJ46GA4003), although this was later rectified.
The authorities proceeded to issue a detention order (Form GST MOV-06) and a show cause notice (Form GST MOV-07) under Section 129(1) of the Central Goods and Services Tax Act, 2017. Earth Minerals argued it was denied a fair opportunity for a hearing, as the final order was signed shortly after the scheduled hearing time. Subsequently, an order under Section 129(3) imposing a penalty and a notice for its deposit were issued, which were later confirmed by the Appellate Authority on July 22, 2025.
