Tag: Vehicle not in Normal Route

Penalty cannot be levied merely because the vehicle was not moving in its normal route – Order Set Aside

In the case of Vishal Steel Supplier Vs. State of UP, Writ Tax No. 741 of 2020, [2024] 164 taxmann.com 609 (Allahabad), a vehicle carrying the goods and requisite documents was moving from Muzaffarnagar to Ghaziabad, which was intercepted at Hapur. No discrepancy with regard to quality, quantity, or description of goods was observed.

Goods were detained on the surmise that the same were not on its normal route and that the driver has the mobile number of one dealer in Hapur and that the driver may unload those goods at Hapur without proper documents.

The Petitioner has submitted that:

  1. In GST Regime, there is no provision for disclosure of route prior to the movement of the goods, as was the case during VAT regime.
  2. Since it was crushing season, there was heavy traffic jam on the way to Moti Nagar, where many sugar mills are situated. Hence, the driver has taken another route via Hapur.
  3. There was no finding recorded by the department that there was any intention to evade payment of tax.
  4. Decision in the case of M/s Om Prakash Kuldeep Kumar v. Additional Commissioner Grade – 2 and another (2024 UPTC Vol. 116 -19), wherein it was held at Para 10 and 11 that:
    • Under the GST Act, there is no specific provision which bounds the selling dealer to disclose the route to be taken during transportation of goods or while goods are in transit however there was a provision under VAT Act to disclose the rout during transportation of goods to reach its final destination. Once the legislature itself in its wisdom has chosen to delete the said provision, this Court opined that the authorities were not correct in passing the seizure order even if the vehicle was not on regular route or on different route.
    • The power of detention as well as seizure can be exercised only when the goods were not accompanying with the genuine documents provided under the Act. The genuineness of the documents has not been disputed at any stage.

It was held by Hon’ble High Court of Allahabad that:

The respondent authorities have not recorded any finding with regard to intention to avoid the payment of tax, in other words the mens rea is absent. Once there is no finding with regard to mens rea to avoid the payment of tax, the impugned order cannot be sustained in the eyes of law on this ground also. The impugned orders dated 30.7.2020 and 10/11.12.2019 are hereby quashed.