It is being observed time and again since the implementation of e-way bill mechanism in GST, the goods are being detained for minor discrepancies. However, it was reported recently that the goods were detained even when they were accompanied by valid invoices and e-way bill on the reason of under-valuation. The supplier assessee filed writ in the High Court of Chhattisgarh and the Hon’ble High Court granted relief to the assessee. The present update seeks to discuss the decision given by the Hon’ble High Court of Chhattisgarh in the case of K.P. SUGANDH LTD.
In the present case, the goods of the petitioner had been seized along with the vehicle by the officers by issuing MOV-07 under section 129(3) of the CGST Act 2017 even though all the required documents such as E- Way Bill and the invoice was produced by the transporter. The goods were detained on the ground that the goods were undervalued in the invoice as they were being sold at price less than the MRP mentioned on it.
The Hon’ble High Court held that when the vehicle was intercepted, the person in charge of the vehicle was carrying the requisite documents which were supposed to have been carried in the ordinary course of transportation such as invoice and e-way bill. Moreover, there was no discrepancy in the quantity and other details mentioned in the invoice and e-way bill. Merely because the manufacturer sells his products to customer or dealer at a price lower than MRP cannot be ground for detaining the vehicle or the goods. At the most, the intercepting officer could have informed the jurisdictional assessing officer for initiating appropriate proceedings against the petitioner. The Hon’ble High Court also placed reliance on the following decisions on similar issue:-
- SAKUL NAZA MOHMD V. STATE OF GUJARAT (GUJARAT HIGH COURT)
- ALFA GROUP V. ASSISTANT STATE TAX OFFICER (KERALA HIGH COURT)
The Hon'ble High Court also held that as regards following the channel of appeal remedy by the petitioner, there is no restriction in quashing the detention order as the entire proceedings for detention and seizure are in contravention of the GST Law at the outset. Hence, the present writ is allowable because the proceedings of detention and seizure are without any authority of law.
In our opinion, decisions, as stated in the present update, are landmark judgments that provide much-needed relief to the assessees and ensure that the confidence of assessee in the tax administration is not lost.
It is also pertinent to mention here that as of now, relaxation has been given by the government by extending the validity of E Way Bills till 30.04.2020 for the e-way bills issued during the period between 20.03.2020 to 29.06.2020 vide Notification No.35/2020 dated 03.04.2020 as we are all fighting against the pandemic disease COVID-19.
STAY HOME AND STAY SAFE. PRIORITIZE YOUR HEALTH.
This is solely for educational purpose.