Hon’ble Allahabad High Court in a case of detention of goods highlighted that state authorities acting illegally and in an arbitrary manner are primarily responsible for restricting state government’s efforts in promoting free flow of trade in the State. Hence, imposed a cost of Rs. 20,000/-.
Read about the case [S/S Shri Surya Traders Versus UoI & Ors. reported as 2022 (1) TMI 439] below:
Facts of the Case
1. Goods were sold to two parties under separate tax invoices & were transported with an e-way bill. Goods in transit were intercepted and during the physical verification, goods of less than 50,000/- rupees, belonging to second dealer were found without tax invoice.
2. SCN was issued and in reply, tax invoice issued in the name of second dealer was submitted. Council for the petitioner submits that since the value of the goods was less than 50,000/- rupees, therefore, e-way bill was not generated. He also proposes that since consignment belonging to the first dealer is complete in all respects, it should be released without security.
3. On the contrary learned Standing Counsel justifies the seizure order and demand of security by arguing that sec. 129(3) read with rule 138 provides for issuance of e-way bill for all transaction accompanying the goods and where the consignment of various dealers were going and there is any discrepancy with regard to any of the consignment, whole consignment has to be seized.
Observations of the Court
1. Since no discrepancy was pointed out by the authorities in the tax invoice submitted along with the reply to the SCN, no adverse inference can be drawn.
2. It is well settled that the quasi judicial authority while exercising of its statutory powers must have to act fairly with open mind in the proceedings especially when they have the powers to take punitive step such as inspection/survey against a person to whom a SCN was issued. Hence detaining / seizing the goods and demanding the security was unjustified.
3. Rule 138 requires generation of e-way bill where the value of goods is more than fifty thousand rupees. Interpretation of the said rule otherwise would make it redundant. Hence no e-way bill was required to be generated.
4. Every transaction has to be looked into independently. Therefore, whole consignment cannot be detained/seized and security cannot be demanded.
Decision
A cost of twenty thousand rupees is imposed upon the erring officers, and amount deposited in terms of impugned order shall be refunded in accordance with law within a period of two months from today.