The Allahabad High Court dismissed a writ petition assailing the order dated 02.03.2019 passed by First Appellate Authority/respondent No.4 and the order dated 14.02.2019 passed by respondent No.5 detaining the goods and the vehicle.
The court observed that to avoid downloading the E-Way bill and bringing the transaction on record, the goods were undervalued.
Brief Facts:
The petitioner is a registered dealer under the Haryana State Goods and Service Tax Act, 2017. He is in the business of manufacturing and sale of Pan Masala and Chewing Tobacco. The petitioner was sending goods through four Tax Invoices. The goods were intercepted by respondent No.5. It was found that the vehicle was transporting 120 Cartons of Pan Masala and tobacco in place of 60 Cartons. The goods were not carrying E-Way Bill because of Rule 138 as the value of goods was claimed to be below Rs.50,000/-. The total value of 60 Cartoons came to Rs.6,12,766 while the value on both the invoices was declared collectively Rs.69,600/-
On 06.02.2019, a show-cause notice was issued. In reply, it was mentioned that tax invoices in respect of tobacco were misplaced by the driver and could not be produced at the time of interception of goods. The value of 30 cartoons of tobacco was Rs.47,465/-.
Respondent No.5 rejected the explanation submitted by the dealer and directed for deposit of integrated tax and penalty. Aggrieved by the order, an appeal was filed before the First Appellate Authority, respondent No.4, which was also dismissed. Hence, the present writ petition.
Contentions of the Petitioner:
The learned counsel for the petitioner contended that the State Taxing Officers were not empowered to detain and check the vehicle, and if there was any discrepancy, they should have reported the matter to the Assessing Officer of the State of Haryana where the matter could have been looked during the assessment proceedings. According to him, the tax invoices for tobacco were generated along with tax invoices of Pan Masala on 02.02.2019 but due to the fault of the driver, the same was not produced before the detaining authority and was submitted at the time the reply was given to the notice. According to him, the mandatory requirement of carrying an E-Way bill as per Rule 138 is only when the goods are valued at Rs.50,000/- or more. In the instant case, as the goods of Pan Masala and Tobacco, which were sent to two different consignees, were less than Rs.50,000/-, no necessity arose to download them.
Contentions of the Respondent:
The learned counsel for the Respondent argued that to avoid the E-Way bill, and the production and the sale being uploaded on the web portal, the goods were deliberately undervalued by the petitioner. According to him, during transit, the driver of the vehicle was only carrying with him two tax invoices and the bill for Pan Masala but no tax invoices for Tobacco were with him.
Observations of the Court:
The Court observed that the question which arises for consideration is whether in the garb of certain protection given under Rule 138 dispensing requirement of E-Way bill for goods valuing below Rs.50,000/-, a dealer, who is a manufacturer, can be allowed to send his goods to different consignees undervaluing the goods and the Tax Authorities not proceed to take action under the Act.
The Court answered that if such conduct of a dealer is permitted, it will harm the business world and lead to a parallel economy and the very purpose of enactment of the Goods and Service Tax Act would frustrate. From the transactions of the petitioner, it is clear that a huge amount of Pan Masala and Tobacco were being transported undervaluing the goods, without downloading the mandatory E-Way bill. In the garb of technicalities, no benefit can be given to a dealer who has intentionally undervalued his goods to escape from the eyes of the law.
The decision of the Court:
The Allahabad High Court, dismissing the petition, held that the action of the State Authorities in detaining the goods and imposing tax and penalty, which have been affirmed by the first Appellate Authority, needs no interference of this Court as the dealer cannot be permitted to take shelter of the fact that no E-Way bill is required in case of goods valued less than Rs.50,000/-.
Case Title: M/S Radha Fragrance v Union Of India & Ors.
Coram: Hon’ble Justice Rohit Ranjan Agarwal
Case no.: WRIT TAX No. - 427 of 2019
Advocate for the Petitioner: Mr. Murari Mohan Rai
Advocate for the Respondent: ASGI, CSC, Mr. Krishna Ji Shukla
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