Case Law Details
Vishal Chobia Vs State of U.P. and 4 others (Allahabad High Court)
Writ petitions are filed challenging the order under Section 129(3) of the UPGST by which the claim of the ownership of the petitioner on the goods detained has been rejected and the same has been passed in the name of the driver of the vehicle.
Petitioner submitted that penalty could have been levied u/s 129 (1) (a) whereas it has been imposed u/s 129(1)(b) in terms of the Clarification dated 31.12.2018 issued by the CBDT, GST Policy Wing. Petitioner is proprietor of Vishal Enterprises and goods in question were owned by him. Authority found them incorrect only on account of the fact that the invoice and e-way bills contained the name of the firm. Registration certificate in form GST REG-06 indicates the name of petitioner’s firm as ‘Vishal Enterprise’ and constitution of business as ‘proprietorship’ and the same status is also reflected on the website of the department on searching through the GISTIN which was ignored while passing order u/s 129(1)(a). Once the ownership of the goods, i.e., the consignee is establishment in terms of the Clarification, the petitioner is deemed to be owner of the goods and is consequently entitled to the relief as claimed. Reliance has been placed on Halder Enterprises Vs. State of U.P. : (2023) 157 taxmann.com 231; Margo Brush India and others Vs. State of U.P. and another : Writ Tax No. 1580 of 2022 decided on 16.01.2023; Green India Vs. State of U.P. : (2024) 160 taxmann.com 349; and Ram India Company Vs. State of U.P. : (2024) 167 Taxmann.com 164.
Department didnot dispute the fact that issue pertaining to imposition of penalty under the provisions of Section 129(1)(a) of the Act is covered by the Clarification dated 31.12.2018 but in view of the finding pertaining to the failure to produce evidence pertaining to ownership of the goods, the said plea is not available. Aadhar Card and Pan Card have not been produced and that only with an intention to evade payment of tax, the goods were being transported from Delhi to Kolkata through the bogus firms.
HC after considering the submissions held that the denial of the respondents to apply the provisions of Section129(1)(a) in the light of the Clarification dated 31.12.2018, is based on the finding that the petitioner has failed to produce evidence regarding ownership of the goods. A perusal of the finding recorded would reveal that the authority observed that only consignor or consignee, whose name is indicated in the invoice and e-way bills, can be deemed as owner of the goods, however the invoices and e-way bills indicate the consignee as M/s Vishal Enterprise and that no material has been produced by Mr. Vishal Chobia pertaining to the ownership of the goods based on Aadhar Card, Pan Card etc. as his name is not indicated in the invoice/ e-way bills. Further, on the site of the department, the GISTIN provides specific details pertaining to the legal name of the business as ‘Vishal Chobia’, trade name as ‘Vishal Enterprise’, constitution of business as ‘proprietorship’ andthat the same was ‘Aadhar authenticated’. In view of the specific indications in the official records about M/s. Vishal Enterprise, being the proprietorship of the petitioner, turning a blind eye by the officers to the said aspect and refusing to recognize the petitioner as deemed owner of the goods being the consignee cannot be sustained.
Finally, writ petitions were allowed and the matter is remitted back to appropriate authority for to pass order afresh in terms of observation made in the order.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. These writ petitions are directed against the orders dated 05.11.2024 passed under Section 129(3) of the Uttar Pradesh Goods and Service Tax Act, 2017 (in short ‘the Act’) by which the claim of the ownership of the petitioner on the goods detained by respondent no. 5 has been rejected and the same has been passed in the name of the driver of the vehicle.
2. It is, inter alia, submitted by counsel for the petitioner that penalty has been imposed by the order impugned under Section 129(1)(b) of the Act, whereas in terms of the Clarification dated 31.12.2018 issued by the Central Board for Taxes and Customs, GST Policy Wing, a penalty in the present case could have been levied under Section 129(1)(a) of the Act, to which the petitioner is not disputing. Further submissions have been made that the authority, while passing the order, despite specific assertion in the claim that the goods in question were owned by the petitioner, found the same as incorrect only on account of the fact that the invoice and e-way bills contained the name of the firm, Vishal Enterprise, of which petitioner is the proprietor. Submissions have been made that respondent-authority has indicated in the order impugned that in relation to the ownership, Aadhar Card and Pan Card have not been produced and that only with an intention to evade payment of tax, the goods were being transported from Delhi to Kolkata through the bogus firms. It is emphasized that the department’s own document, i.e., registration certificate in form GST REG-06 indicates the name of petitioner’s firm as ‘Vishal Enterprise’ and constitution of business as ‘proprietorship’ and the same status is also reflected on the website of the department on searching through the GISTIN, however, ignoring the same, a factually incorrect finding has been recorded, which has led to depriving the petitioner of the benefit under Section 129(1)(a) of the Act.
3. Further submissions have been made that once the ownership of the goods, i.e., the consignee is establishment in terms of the Clarification, the petitioner is deemed to be owner of the goods and is consequently entitled to the relief as claimed. Reliance has been placed on Halder Enterprises Vs. State of U.P. : (2023) 157 com 231; Margo Brush India and others Vs. State of U.P. and another : Writ Tax No. 1580 of 2022 decided on 16.01.2023; Green India Vs. State of U.P. : (2024) 160 taxmann.com 349; and Ram India Company Vs. State of U.P. : (2024) 167 Taxmann.com 164.
4. Learned counsel for the respondents, though does not dispute the fact that issue pertaining to imposition of penalty under the provisions of Section 129(1)(a) of the Act is covered by the Clarification dated 31.12.2018 as well as the judgment cited on behalf of the petitioner, however, submits that in view of the finding pertaining to the failure to produce evidence pertaining to ownership of the goods, the said plea is not available.
5. We have considered the submissions made by counsel for the parties and have perused the material available on record.
6. The denial of the respondents to apply the provisions of Section 129(1)(a) of the Act, in the light of the Clarification dated 31.12.2018 and judgments of this Court, is based on the finding that the petitioner has failed to produce evidence regarding ownership of the goods. A perusal of the finding recorded would reveal that the authority observed that only consignor or consignee, whose name is indicated in the invoice and e-way bills, can be deemed as owner of the goods, however the invoices and e-way bills indicate the consignee as M/s Vishal Enterprise and that no material has been produced by Mr. Vishal Chobia pertaining to the ownership of the goods based on Aadhar Card, Pan Card etc. as his name is not indicated in the invoice/ e-way bills.
7. The finding recorded is essentially de-hors the material available with the authority wherein the registration certificate pertaining to the GISTIN clearly indicates the status of the petitioner as proprietor of M/s. Vishal Enterprise. Further, on the site of the department, the said GISTIN provides specific details pertaining to the legal name of the business as ‘Vishal Chobia’, trade name as ‘Vishal Enterprise’, constitution of business as ‘proprietorship’ and that the same was ‘Aadhar authenticated’. In view of the specific indications in the official records about M/s. Vishal Enterprise, being the proprietorship of the petitioner, turning a blind eye by the officers to the said aspect and refusing to recognize the petitioner as deemed owner of the goods being the consignee cannot be sustained.
8. In view of the above fact situation, both the writ petitions are allowed. The impugned orders of penalty dated 05.11.2024 (Annexure-1) passed by respondent no. 5, are set aside. The matter is remanded back to the competent authority to pass a fresh order in terms of the observations made hereinbefore and in terms of the provisions of Section 129(1)(a) of the Act, within a period of two weeks from the date of this order.
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