M/S Galaxy Enterprises v. State Of U.P. And 2 Others

Neutral Citation No. - 2023:AHC:212494

Case :- WRIT TAX No. - 1412 of 2022

Petitioner :- M/S Galaxy Enterprises

Respondent :- State Of U.P. And 2 Others

Counsel for Petitioner :- Pranjal Shukla

Counsel for Respondent :- C.S.C.

1. Heard Mr. Pranjal Shukla for the petitioner and Mr. Rishi Kumar,

2. The instant Writ Tax is being entertained by this Court in view of the

fact that G.S.T. Tribunal is not functional in the State of Uttar Pradesh

pursuant to the Gazette notification of the Central Government bearing

3. By means of this writ petition, the petitioner is assailing the order

dated 27.1.2022 passed by Assistant Commissioner, Mobile Squad, State

Goods and Services Tax, Khataunil Unit Muzaffarnagar, respondent no. 3

and the order dated 2.7.2022 passed by Additional Commissioner, Grade -2

(Appeal), State Goods and Services Tax Muzaffarnagar, respondent no. 2.

4. Brief facts of the case as stated, are that the petitioner is a

proprietorship concerned having GSTIN No. 09AAPFG6376E1ZY and

engaged in the business of manufacturing and sale of laminated papers. In

the normal course of business, the goods were loaded on Truck no. RJ 01

GC 4269 for dispatch from Muzaffarnagar to Rajasthan along with tax

invoices, E-way Bills and GR. During transit, the goods were intercepted on

25.1.2022 and Form GST MOV-2 was issued by respondent no. 3 after

recording the statement of the truck driver and after physical verification

Form GST MOV-04 was issued on the ground that the goods were found to

be different than mentioned in accompanying documents. Thereafter a show

cause notice was issued in Form GST MOV-07 on 27.1.2022. The petitioner

submitted reply and being not satisfied with the same, penalty was imposed by

order dated 27.1.2022. Thereafter the petitioner filed an appeal against the said

order, which was also dismissed by impugned order dated 2.7.2022. Hence the

5. Learned counsel for the petitioner has submitted that it is admitted that the

goods were moving along with tax invoice no. 139 dated 25.1.2022 along with e-

way bill but before physical verification or issuance of show cause notice or

passing the detention as well as seizure order, another tax invoice no. 140 dated

25.1.2022 along with e-way bill was produced rectifying the mistake but still

notice was issued and penalty order was passed, which has been affirmed by the

appellate authority without proper consideration of claim made by the petitioner.

He further submitted that once before issuance of show cause notice or passing

of detention as well as seizure order, the genuine tax invoice along with e-way

bill was produced and the mistake was rectified, the authorities ought not to have

initiated the proceeding. He submitted that the petitioner has duly explained the

discrepancy, which has been occurred due to clerical error of his accountant and

in support thereof, also filed an affidavit of the accountant but none of the

authorities have considered the same. The petitioner has no intention to evade

the payment of tax as such the impugned order is not justified in the eyes of law

and same is liable to the quashed.

6. In support of his contention, learned counsel for the petitioner has relied

upon the Division Bench judgement of this Court in M/s Axpress Logistics

India Pvt. Ltd. Vs. Union of India and others, (Writ Tax No. 602 of 2018,

decided on 9.4.2018) and M/s Bhumika Enterprises Vs. State of UP and

others (Writ Tax No. 564 of 2018, decided on 3.4.2018). He submitted that in

the aforesaid case, Division Bench of this Court has held that if the tax invoice

along with E-way bill are produced before passing the seizure as well as

detention order, the proceedings is not justified. He submitted that the present

case is identical and is squarely covered with the aforesaid Division Bench

judgement of this Court. He prays for allowing the writ petition .

7. Per contra, Mr. Rishi Kumar, learned A.C.S.C. has supported the

impugned orders and submitted that at the time of detention of goods in question,

the goods were found different and quantity was also different as mentioned in

the accompanying documents such as e-way bill and tax invoices; if the goods

were not detained, the petitioner would have succeeded in evading the payment

of legitimate tax to be paid to the State. He further submitted that subsequent tax

invoice no. 140 dated 25.1.2022 is clear cut breach of the provisions specifically

mentioned under Rule 31 (1) of UP GST Rules. He prays for dismissing the writ

8. After hearing learned counsel for the petitioner, the Court has perused the

9. On perusal of the records, it transpires that the goods in question were in

transit during its onward journey from Muzaffarnagar, U.P. to Bhilwada,

Rajasthan and the same were intercepted on the ground that the goods found

different as mentioned in the accompanying document but before detention and

seizure order could be passed, the petitioner produced another bill i.e. tax invoice

no. 140 of 25.1.2022 along with e-way bill. The said fact is not disputed by any

of the authorities below. While issuing show cause notice in GST MOV 09 the

authorities below has recorded a finding which is quoted hereunder:-

"प्रस्तु�तु टै�क्स इनवॉ�इस अहस्तु�क्षरि�तु ह�, जि�सकी� वॉ�धतु� स�दि�ग्ध ह� , ��दिकी UPGST 2017 Act 2017 ध��� 31(1) तुथा� निनयम 46 की� स्पष्ट उल्लं�घन ह�। टै�क्स इनवॉ�इस म4

समस्तु म�लं की� वॉ�न 28628 दिकी. ग्रा�. ह�, �बदिकी इ -वॉ: बिबलं म4 म�त्रा� 170588 दिकी. ग्रा�. घ�बि>तु ह�, ��दिकी 2017 UPGST Act 2017 की: निनयम 138 ( ) A की� उल्लं�घन ह�। भौ@नितुकी सत्य�पन प� आपकी: द्वा��� एकी�उ� टै4टै की� गलंतुF बतु�तु: ह�ए प्रश्नगतु कीन्स�इनम4टै स: सम्ब�निधतु टै�क्स इनवॉ�इस स�ख्य� 0140 दि�न��की 25.01.2022 प्रस्तु�तु दिकीय� गय�। प्रस्तु�तु टै�क्स इनवॉ�इस स�. 0140 म�लं की� मKवॉम4टै प्र��म्भौ ह� ��न: की: उप���तु ���L दिकीय� गय� ह�।"

10. The authorities below has not accepted the documents on the ground that

same were produced after the movement of goods. But lost the site of the fact

that the discrepancies were cured before the detention or seizure order could be

11. Once the documents were produced before passing of the detention /

seizure order, the authorities ought not to have proceeded further as held by the

the Division Bench judgement of this Court in the case of M/S Axpress

Logistics India Pvt. Ltd (supra) and M/s Bhumika Enterprises (supra). Since

the Division Bench has specifically decided the said issue in an identical matter

way-back in the year 2018, the impugned order is not justified as the documents

have already been produced before passing of the detention as well as seizure

12. In view of the facts as stated above, the writ petition succeeds and is

allowed. The impugned orders are set aside. The matter is remanded to the first

appellate authority, who shall pass a fresh order in accordance with law,

expeditiously, preferably within a period of two months from the date of

producing a certified copy of this order.

Order Date :- 6.11.2023 Rahul Dwivedi/-

2023-11-06T13:21:36+0530 High Court of Judicature at Allahabad