Under GST Act, there is no specific provision to disclose route of transportation of goods

Under GST Act, there is no specific provision which bounds selling dealer to disclose route to be taken during transportation of goods – High Court

In a recent judgment, Hon’ble Allahabad High Court has held 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.

ABCAUS Case Law Citation:
ABCAUS 4150 (2024) (07) HC

In the instant case, the assessee had filed a Writ Petition praying for quashing the order passed by the Mobile Squad of Commercial Tax.

The goods in question were on its onward journey from one district to another accompanying all the requisite documents as required under the law i.e. tax invoice, e-way etc. The vehicle was were intercepted by the mobile squad and no discrepancy was found with regard to quality, quantity as well as description of the goods in question.

However, the goods were detained only on the basis of surmises and conjunctures that the goods were not on its normal route and driver of the goods was having mobile number of one dealer of other district therefore, an inference has been drawn that the goods is likely to be unloaded at non designated destination without having proper documents.

The Hon’ble High Court observed that it was not in dispute that the goods were coming from designated District and same was intercepted during transit. As per the document accompanying with the goods in question, no discrepancy was found. Further the goods in question were going up to designated district and same was intercepted at intervening district under the pretext that it was not on its normal route as well as the driver of the truck was having mobile number of a dealer of intervening District., therefore, inference has been drawn that the goods in question will be unloaded at said distt. without having any proper document.

The Hon’ble High Court noted that no discrepancy had been pointed out at the time of detention or seizure of the goods with regard to quality or quantity of the goods and the respondent authorities have also not recorded any finding with regard to mens ria to avoid the payment of tax

Further, the Hon’ble High Court observed that it was also not the case of the Authorities that under the GST Act, the dealer is required to disclose the specific route of its journey for movement of the goods. Learned ACSC also could not show that under the GST Act, the transporter of the goods has to adopt a particular route for transportation of the goods.

The Hon’ble High Court noted that in a similar circumstances it had delat with the issue that the goods along with truck was not on the route of its destination, therefore, there was intention to evade tax. The Bench opined 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 Hon’ble High Court stated that since the GST Authorities had not recorded any finding with regard to intention to avoid the payment of tax, in other words the mens ria was absent. Once there is no finding with regard to mens ria to avoid the payment of tax, the impugned order cannot be sustained in the eyes of law on this ground also.

Accordingly, the impugned orders were quashed. 

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