Exide Industries Ltd. Vs Addl. Commissioner Grade-II (Appeal)-1 (Allahabad High Court)
Goods not liable for seizure and penalty thereof when designated route not taken during transportation
Summary: The Allahabad High Court (Lucknow Bench), in Exide Industries Ltd. v. Addl. Commissioner Grade-II (Appeal)-1, ruled on July 9, 2024, that goods transported under GST cannot be seized or penalized solely because the vehicle deviated from its expected route. The case arose when Exide Industries Ltd. was penalized under Section 129 of the Uttar Pradesh GST Act for a route deviation during the transport of batteries. Despite the genuine tax invoices, e-way bills, and other accompanying documents, authorities alleged the deviation suggested an intent to evade tax. The Court observed that there is no provision in the GST Act mandating a designated route for transporting goods, unlike the earlier VAT regime. It noted that the genuineness of the transport documents was undisputed, and the goods were intercepted near their destination. Referring to precedents from the Gujarat High Court (Karnataka Traders v. State of Gujarat) and Telangana High Court (Vijay Metal v. Deputy Commercial Tax Officer), the Court held that a route deviation without evidence of tax evasion does not justify seizure. Consequently, the writ petition was allowed, and the imposed penalty was set aside. This ruling underscores the legal principle that procedural deviations, in the absence of malintent, should not attract penal consequences under GST laws.
