Detention of Goods and Vehicle on mere procedural lapse is also valid: Says High Court

Facts

The petitioner in the writ petition is a Company engaged in the manufacture and sale of Power Cables and is a registered dealer under the GST Act. 

The goods and the vehicles were detained by the respondents on the ground that there was only one common invoice (for 22 packages) that was generated in respect of the two consignments, and when compared with the number of packages that were contained in each of the vehicles, there was a shortage of packages in both the vehicles. It was also found that the petitioner had not complied with the procedure prescribed under Rule 55(5) of the CGST Rules while transporting goods in semi-knocked down (SKD) or completely knocked down (CKD) condition or in batches or lots. In particular it was pointed out that the consignments were not covered by separate delivery chalans for each vehicle.

It would appear that although the petitioner subsequently produced two separate delivery chalans before the proper officer, the said chalans did not contain the details required under Rule 55(1) of the CGST Rules and hence the proper officer proceeded to issue the detention order in Form GST MOV-6, and notice in Form GST MOV-7 to the petitioner. In the writ petition, the petitioner impugned the said detention order and notice and sought an expeditious release of the goods and the vehicle.

Arguments by Applicant

Sri. A Kumar, the learned counsel for the petitioner would contend that the respondents erred in detaining the goods and the vehicles for a mere procedural lapse occasioned by the petitioner. Alternatively, it is contended that there was a complete misunderstanding of the scope of Rule 55 of the CGST Rules and the provisions of the said Rule did not get attracted to the transportation in question. As regards the discrepancies pointed out with regard to the delivery chalans, it is contended that the said defects had been subsequently cured, and the details required for co- relating the transport documents with the goods that were being transported were all available with the proper officer who ought to have treated the breach as merely venial or technical and refrained from detaining the goods.

Held by High Court

On a consideration of the rival contentions, I am of the view that under Section 129 of the Act, if a proper officer who is entrusted with the task of detaining goods, finds that they have been transported in contravention of the rules, he does not have the discretion to condone the procedural lapse or relax its rigour in particular cases. He must interpret the Rule strictly keeping in mind the statutory scheme that aims to curb tax evasion. In as much as the adjudication that is expected of him is a summary one, he can do no more than determine whether or not on a literal reading of the statutory provisions, together with the circulars issued from time to time, there has been a breach occasioned thereof. Any person aggrieved by the order of the proper officer must necessarily approach the appellate authority before which an appeal against the adjudication order under Section 129 (3) of the Act is maintainable. In the instant case too, the remedy of the petitioner is to approach the appellate authority under the Act against the finding of the proper officer.

The upshot of the above discussion is that I do not find any reason to interfere with the adjudication orders in Form GST MOV-9 impugned in the writ petition. The petitioner is relegated to his alternate remedy of preferring appeals against the said adjudication orders before the appellate authority under the Act. All contentions, legal and factual, are left open to be agitated by the petitioner before the appellate authority.

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