GST Authorities Cannot Act Against Transporter Of Goods When Genuine E-Way Bill Present: Allahabad High Court
The Allahabad High Court has held that under GST Act, the department cannot proceed against an assessee for transport of goods, if a genuine e-way bill is present along with the consignment. Justice Piyush Agarwal held that this would be especially impermissible if the validity of the e-way bill was not disputed by the authorities. “Once the goods in question is duly accompanying...
The Allahabad High Court has held that under GST Act, the department cannot proceed against an assessee for transport of goods, if a genuine e-way bill is present along with the consignment.
Justice Piyush Agarwal held that this would be especially impermissible if the validity of the e-way bill was not disputed by the authorities.
“Once the goods in question is duly accompanying by e-way bill, which clearly demonstrates the genuineness of the documents and during validity of the said e-way bill, which has not been cancelled, the Department is well aware of the movement of the said goods in question and therefore, no intention to evade payment of tax can be attributed to the petitioner,” held the Court.
In pursuance of a purchase order, the petitioner firm was transferring goods from its offices in Noida to its primary place of business in Lucknow. A delivery challan was also issued for this purpose. The petitioner sought to fix an error in the challan by e-invoice generated on 19.12.2023, which was also reflected on the e-invoice portal of the department.
On the same day, the consignment was seized by a mobile squad of the department, citing violations of the GST Rules. The petitioner paid the required dues and the goods were released. Subsequently however, the department passed an order under S. 129(3) of the GST Act. Aggrieved, the petitioner approached the High Court.
The Court relied on the judgement of Allahabad High Court in M/s Sleevco Traders v. Additional Commissioner & Anr. to hold that where the department had raised no objection to the e-way bill generated for the transportation, there could not be any violation of the GST Rules.
“Once the delivery of the goods which has not been taken by the petitioner, has not been disputed by the Revenue as well as the validity of the e-way bill generated by Maharashtra party, which was valid up to 15.02.2020 i.e. the date of detention and passing of the order under Section 129 (3) of the G.S.T. Act, there cannot be any violation or contravention of the provisions of G.S.T> Act as well as the Rules framed thereunder,” held the Court in M/s Sleevco.
Accordingly, the petition was allowed.
Case Title: M/S Prostar M Info Systems Limited v. State of U.P. and 3 others [WRIT TAX No. - 1469 of 2024]