The Allahabad High Court has made a scathing remark on the arbitrary and illegal action of Uttar Pradesh government officials of the Business Tax Department with traders.
A single-judge bench of Justice Piyush Agrawal observed that the state government have tried to create an atmosphere for free flow of trade and commerce so that a good business environment can be developed in Uttar Pradesh, which can be used for development purpose but the state authorities are bent upon harassing the state’s trading community.
Any amount deposited in terms of the impugned order, the same shall be refunded in accordance with law within a period of two months, the court ordered.
The court noted that if the authorities were of the opinion that the transaction was not duly recorded in the books of account or had committed any contravention of the provisions of the Act, they are well equipped with all the provisions to make an inspection/survey at business premises of the petitioner in accordance with law but the authorities were not justified in detaining/seizing and demanding the security of goods as documents accompanying the goods as well as submitted along with the reply fully covers the transaction in question and by no stretch of imagination, it can be attributed any contravention of the provisions of UPGST Act or Rule.
The Court further observed that so far 87 bags of Betel Nut product were accompanied with all proper documents. The documents of 3 bags were produced along with the reply of the show cause notice but the authorities below were not justified in detaining/seizing the goods and demanding of security as there was no contravention of the provision of the Act. The authorities have illegal and in arbitrary manner have referred to the various discrepancies such as the pouches not having batch number, packing date, expiry date, manufacturing date and referred that under the Food Safety Regulation, the said dates/details were required. But so far as the GST is concerned, the authorities have failed to record any provision for justification of the seizure of the goods in question.
What was the case?
The petition has been filed assailing the order dated April 8, 2021 passed by the respondents by which the appeal of the petitioner has been rejected and the order dated October 16, 2019 under Section 129 (3) of UPGST Act, 2017 was confirmed.
Counsel for the petitioner submitted that the petitioner is a registered dealer and engaged in the business of selling Ankle (Sweet Supari) and Varanasi Ashik (Betel Nut Product). In the normal course of business, 90 bags of Betel Nut Product were sold to two different registered dealers by issuing two tax invoices, were being transported to its destination and the same were along with tax invoices & e-way bills.
The said goods were intercepted by the proper officer on October 9, 2019 around 17:33 hours at Varanasi. On the physical verification, three bags of Betel Nut Product were found without tax invoice and a show-cause notice was issued to the petitioner and in reply to the show-cause notice, the petitioner has submitted a tax invoice issued in the name of M/s Lal Ji Pan Bhandar, Tikona Park, Nawabganj, Gonda.
He further submitted that the said tax invoice was handed over to the transporter but by mistake he left it behind. He further submitted that since the value of the goods was less than Rs 50,000, therefore, e-way bill was not generated.
He also submitted that so far as the consignment of 87 bags sold to M/s Karuna Nidhan Agency are completed in all respects, the said goods should have not been seized to that extent. If any, the discrepancy can be attributed it should be with regard to three bags only.
Counsel for the petitioner prayed that the goods be released without security and writ petition be allowed.