Re-use of bags having multiple batch numbers for transporting raw material does not amount to tax evasion or concealment by taxpayer.

Facts:

Petitioner is a private limited company carrying on the business of manufacturing soaps at Haridwar, Uttarakhand.

The goods of the petitioner was being transported from Kutch, Gujarat to Haridwar, Uttarakhand.

The goods which were being transported in the form of raw material through a truck were intercepted on 03.03.2018 at Muzaffarnagar.

The detaining authority had issued a notice which was replied by the petitioner. The goods were subsequently released complying the provisions of Section 129(1)(a) of the Act.

Thereafter, the first appellate authority has proceeded to pass the order dated 10.12.2021 dismissing the appeal of the petitioner.

Learned counsel for the petitioner contended that the petitioner was using the bags for carrying raw material five to six times and explanation was furnished by the petitioner to the authorities as well as before the first appellate authority but only on the ground that the bags had two batch numbers, thus, the explanation afforded by the petitioner was not accepted and appeal was dismissed.

Learned Standing Counsel while opposing the writ petition has invited the attention of the Court to the counter affidavit wherein it has been stated that on the bags which were being used in transit of raw material found two batch numbers and, thus, it can be safely presumed that there were undeclared goods contrary to invoice.

In reply, learned counsel for the petitioner, submitted that the case of petitioner from day one is that the bags which were used in transportation of raw material were used five to six times and, thus, there was different batch numbers mentioned on the said bags and there was no concealment on the part of petitioner.

Held:

As far as the mention of two batch numbers on the bags is concerned, this Court finds that explanation furnished by the petitioner before the authorities as well as the first appellate authority was specific that it was used five to six times for transportation of raw material and it was not a finished product which was transported by the petitioner where requirement of new bags arises.

The explanation afforded by the petitioner appeals to the Court and the finding recorded by the fist appellate authority does not hold any ground, in view of the said fact, the order dated 10.12.2021 passed by the first appellate authority in appeal No. GST-0037/2020 is hereby set-aside.

Any amount deposited by the petitioner before the first appellate authority shall be refunded within a period of fifteen days from the date of production of a certified copy of this order before him.

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Detention of Vehicle and Goods

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