-1- NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 36 of 2020 Reserved on : 05/03/2020 Delivered on : 16/03/2020 K.P. Sugandh Ltd. Plot No. 70, Sector -A, Sirgitti, Industrial Area, Bilaspur Chhattisgarh. Through Its Director Vibhav Panday S/o Late Shri P.S. Pandey, Aged About 50 Years, R/o Flat No. 403, Ravi Heights, Kumharpara, Jarhabhanta, Bilaspur Chhattisgarh. ---- Petitioner Versus 1. State Of Chhattisgarh Through Secretary, Department Of Finance, Mahanadi Bhawan, Atal Nagar, Raipur Chhattisgarh. 2. Commissioner Chhattisgarh Goods And Services Tax, Atal Nagar, Raipur Chhattisgarh. 3. Joint Commissioner Chhattisgarh Goods And Services Tax, Bilaspur Division II, Jai Ambe Plaza Opposite New Bus Stand, Bilaspur Chhattisgarh. 4. Deputy Commissioner Chhattisgarh Goods And Services Tax, Bilaspur Division - II, Jai Ambe Plaza Opposite New Bus Stand, Bilaspur Chhattisgarh. ---Respondents AND WPT No. 49 of 2020 Kay Pan Sugandh Ltd Plot No. 75 And 76 , Sector - A, Sirgitti, Industrial Area, Bilaspur Chhattisgarh. Through Its Director Ram Gopal Agnihotri S/o Late Shri Dhaniram Agnihotri, Aged About 58 Years, R/o House No. 29, Govind Nagar, Sirgitti, Bilaspur Chhattisgarh. ---- Petitioner Versus 1. State Of Chhattisgarh Through Secretary, Department Of Finance, Mahanadi Bhawan, Atal Nagar, Raipur Chhattisgarh. 2. Commissioner Chhattisgarh Goods And Services Tax, Atal Nagar, Raipur Chhattisgarh., District : Raipur, Chhattisgarh 3. Joint Commissioner Chhattisgarh Goods And Services Tax, Bilaspur Division - II, Jai Ambe Plaza Opposite New Bus Stand, Bilaspur Chhattisgarh. -2- 4. Deputy Commissioner Chhattisgarh Goods And Services Tax, Bilaspur Division - II, Jai Ambe Plaza Opposite New Bus Stand, Bilaspur Chhattisgarh. ---Respondents For respective Petitioners : Mr. Rohit Sharma, Advocate Mr. Manoj Paranjpe, Advocate For State : Mr. Jitendra Pali, Dy. A.G. Ms. Sunita Jain, G.A. Hon'ble Shri Justice P. Sam Koshy C.A.V. ORDER 1. Since facts and grounds raised in both these writ petitions and dates also being identical and impugned orders also being same, both these writ petitions are being decided by this common judgment. 2. challenge in present writ petition is to order dated 17.01.2020 (Annexure P/1) passed by respondents for purpose of release of vehicle carrying goods belonging to petitioners from manufacturing centers to dealer. 3. relevant facts, which are relevant for adjudication of present dispute is that petitioners are limited companies under provisions of Companies Act. petitioners herein are manufacturers of 'Pan Masala and Tobacco Products'. On 14.01.2020, petitioners dispatched goods both Pan Masala and Tobacco Products to its customer vide Maxi Truck Plus 1.2 TPS No. CG 04 ME 3494 belonging to transporter Shyam Transport Company. vehicle was being driven by one Shanker Yadav, resident of Ward No.3, Tilda, District Raipur. customer to which -3- goods were being dispatched was M/s. Ravi Agency at Jhulelal Market, Raipur. While goods were being transported, petitioners/ establishment had issued with tax invoice as well as e- way bill generated and handed same to Incharge of conveyance i.e. driver namely Shanker Yadav. When said vehicle/conveyance left for Raipur on 14.01.2020, vehicle was intercepted by officials of respondents/ Department and asked for details of consignment. driver of vehicle i.e. person, who was Incharge of conveyance at time of interception produced before authorities relevant invoice bill and also produced e-way bill as was required under Act to authorities concerned. 4. Inspite of Incharge of conveyance producing necessary invoice bill and e-way bill respondent authorities seized vehicle and goods on grounds of there being discrepancies in valuation of goods and thereafter detained vehicle and goods. Subsequently, notice (Annexure P/4) dated 14.01.2020 FORM GST MOV-07 under Section 129(3) of Central Goods and Service Tax Act, 2017 was issued to person Incharge of conveyance i.e. driver. Immediately, thereafter petitioners moved application for release of vehicle vide their response dated 17.01.2020. Without considering any of contentions raised by petitioners in said reply to notice, respondents have passed impugned order (Annexure P/1) whereby they have assessed tax payable on goods as also penalty -4- applicable on said assessment made for purpose of releasing of goods and vehicle. It is this order which is under challenge in present writ petition. 5. contention of petitioners primarily is that when transport vehicle is intercepted by authorities of respondents all that person Incharge of conveyance is required to keep along with him is documents as is required under Section 68 of Central Goods and Service Tax Act of 2017 and Rules 138 & 139 of Central Goods and Service Tax Rules of 2017. According to counsel for petitioners, discrepancies in valuation of goods is not ground, which would be available for Department for detaining and seizure of vehicle and goods. According to counsel for petitioners, while intercepting transport vehicle carrying goods all that Inspector has to verify is that whether person Incharge of conveyance has invoice bill for goods being transported and whether driver also has e-way bill. 6. According to petitioners, respondents if at all in course of inspection of vehicle or moment they find that there was discrepancy in valuation, they could not have seized and detained vehicle or goods rather should have permitted vehicle to proceed further to destination of supply as per invoice. It was contention of petitioners that as regards dispute of valuation, respondent authorities could have initiated proceeding against petitioners in accordance with law as is -5- applicable for evasion of tax. According to petitioners, item seized by respondent authorities is also perishable and it has its own shelf life. It was further contended that in case if goods are not immediately released, petitioners shall be put to substantial irrecoverable loss for no fault of theirs. It was lastly contended by petitioners that plain reading of notice under Section 129 issued vide Annexure P/4 and order passed by respondents (Annexure P/1) would clearly reveal that there is no specific details of evasion of tax as such reflected from notice except for bald allegation of discrepancy in valuation. 7. State counsel on contrary opposing petition submits that it is case where during course of inspection of conveyance, Inspecting Agencies found discrepancies in valuation of goods being transported and that was reason for detention of vehicle and seizure of goods. According to respondents, respondent authorities had immediately issued notice under Section 129 to which petitioners also submitted their reply on 17.01.2020 and since reply of petitioners were not convincing, satisfactory or acceptable, respondent authorities have passed order under Section 129. contention of petitioners is that impugned order under Section 129 is one which is appealable under Section 107, therefore writ petition for this reason itself is not maintainable. State counsel on instructions submits that as regards discrepancy it has been informed that price at which product was sold to customer -6- was not matching MRP of product, which reflected in packet transported. second ground raised by respondents is that subject to compliance of order (Annexure P/1), respondent authorities would release goods and vehicle seized and detained by respondents and thus prayed for rejection of writ petition. 8. Having heard contentions put forth on either side and on perusal of record, some of undisputed rather admitted positions from submissions made on behalf of either side is that petitioners are in business of manufacturing of Pan Masala and Tobacco Products since 14.01.2020 from petitioners-establishment. Some consignments of goods were transported to consumer at Raipur and product was being transported on Maxi Truck Plus 1.2 TPS bearing registration No. CG 04 ME 3494. said vehicle belonged to Shyam Transport Company. vehicle was being driven by Driver Shanker Yadav. What is further to be seen is that undisputedly when vehicle was subjected to inspection, person Incharge of conveyance i.e. driver had with him invoice bill duly issued which matched quantity found in vehicle. In addition, driver also was in possession of e-way bill duly generated and which also was posted in Web portal of Department, which again had details of consignment and also details of tax paid and both of which was produced to Inspecting Authorities, who had intercepted vehicle on -7- 14.01.2020. While goods was being transported from petitioner/ manufacturer to its consumer at Raipur. 9. Thus, from aforesaid factual admitted position, as it stands when vehicle was intercepted from 14.01.2020, person Incharge of conveyance was in fact carrying requisite documents, which he was supposed to carry in course of transportation of goods. As regards discrepancy found in course of inspection, only observation made by authorities concerned is that valuation does not seem to have been properly conducted. 10. Merely because manufacturer sells his products to its customer or dealer at price lower than MRP, as such cannot be ground on which product or vehicle could be seized or detained. If at all if this, according to respondents, is contrary to law, authorities are supposed to draw appropriate proceeding under law. If at all what State counsel has submitted is to be accepted, even then it would be only case of alleged sale of product at lower costs than MRP. Inspecting Authorities for alleged discrepancy could have only intimated Assessing Authority for initiating appropriate proceedings. What is more relevant to take note of is fact that details in invoice bill as well as in e-way bill matched products found in vehicle at time of inspection except for price of sale. -8- 11. High Court of Kerela in case of Alfa Group v. Assistant State Tax Officer (2020) 113 taxmann.com 222 (Kerela) in identical set of facts has held as under: On consideration of facts and circumstances of case as also submissions made across Bar, I find that none of reasons stated in Ext. P2 order justify detention of goods. There is no provision under GST Act which mandates that goods shall not be sold at prices below MRP declared thereon. Further, there is nothing in Ext. P2 order that shows that, on account of alleged wrong classification of goods there was any difference in rate of tax that was adopted by assessee. In my view when statutory scheme of GST Act is such as to facilitate free movement of goods, after self assessment by assessees concerned, respondents cannot resort to arbitrary and statutorily unwarranted detention of goods in course of transportation. Such action on part of department officers can erode public confidence in system of tax administration in our country and, as consequence, country's economy itself. Under such circumstances, I quash Ext. P2 detention order and direct respondents to forthwith release goods belonging to petitioner on petitioner producing copy of this judgment before said authority. I also direct Commissioner, Kerala State Taxes Department, Thiruvananthapuram to issue suitable instructions to field formations so that such unwarranted detentions are not resorted to in future. Registry shall communicate copy of this judgment to Commissioner, Kerala State Taxes Department, Thiruvananthapuram for necessary action. 12. similar view has also been taken by High Court of Gujarat for grant of interim relief in case of Sakul Naza Mohmd v. State of Gujarat in Special Civil Application No. 15655/2019. 13. So far as ground of alternative remedy available to petitioner as pleaded by State Government is concerned, this Court is of opinion that since case of petitioners at outset itself was that entire proceedings for detention of vehicle and seizure of goods being in total contravention to GST law, relegating petitioners to avail alternative -9- remedy of appeal under Section 107 would not be proper, legal and justified. More particularly when this Court also finds that proceedings of detention and seizure of goods and vehicle by respondents is without any authority of law. 14. Given said facts and circumstances of case, this Court is of opinion that under valuation of good in invoice cannot be ground for detention of goods and vehicle for proceeding to be drawn under Section 129 of Central Goods and Service Tax Act, 2017 read with Rule 138 of Central Goods and Service Tax Rules, 2017. In view of aforesaid impugned order Annexure P/1 i.e. order passed under Section 129 and order of demand of tax and penalty both being unsustainable deserves to be and is accordingly set-aside/quashed. respondents are forthwith directed to release goods belonging to petitioners based on invoice bill as well as e-way bill. 15. Quashment of impugned order by itself would not preclude State Authorities from initiating appropriate proceedings against petitioners for alleged act of under valuation of goods as compared to MRP on product in accordance with law. 16. With aforesaid observations, present writ petitions stand allowed. Sd/- (P. Sam Koshy) Judge Ved K.P. Sugandh Ltd. v. State Of Chhattisgarh / Commissioner Chhattisgarh Goods And Services Tax, Raipur / Joint Commissioner Chhattisgarh Goods And Services Tax / Deputy Commissioner Chhattisgarh Goods And Services Tax