The Allahabad High Court has held that the seizure under Goods and Service Tax (GST) can be made citing under-valuation.
The bench of Justice Piyush Agrawal has observed that the seizure can be made even on the ground of under valuation, if under valuation is deliberate for the purpose of avoiding payment of tax or to defeat the provisions of the GST Act.
The petitioner/assessee is a proprietorship firm engaged in the business of trading of pan masala and scented tobacco. In the normal course of business, the petitioner has received an order for supply of pan masala and scented tobacco from various registered dealers situated at Delhi and in pursuance of the aforesaid order tax invoice was raised on which IGST, cess was charged.
Since the value of the goods was less than the prescribed limit, therefore, e-way bill was not generated and through tax invoice, the goods were transported from West Bengal/ Assam to New Delhi and during its onward journey the same was transshipped at Kanpur where the same was intercepted.
The statement of the truck driver was recorded in which he stated that the goods were loaded from Kanpur and on the said premise, show cause notice was issued to which the petitioner submitted its reply that crossing challan prescribed under the Act was accompanying the goods showing that the goods were transshipped at Kanpur during its onward journey to Delhi and since the value of the goods was less than Rs. 50,000 e-way bill was not required to accompany the goods, hence the proceedings cannot be initiated.
The department contended that it is simply a case of tax evasion. The goods were detained and seized not only on the grounds of under valuation but also on the grounds of non-genuine documents accompanying the goods. On perusal of the documents accompanying the goods, it shows that the movement of the goods had started from West Bengal/Assam to Delhi but the statement of the driver of the vehicle was that the goods were loaded from Kanpur.
The court held that the dealer had intentionally undervalued the goods to take wrong advantage of Rule 138 which dispenses the requirement of e-way bill accompanying the goods, and cannot be spared.
Case Details
Case Title: M/S Jaya Traders Versus Additional Commissioner Grade
Case No.: Writ Tax No. – 1022 Of 2021
Date: 03.03.2025
Counsel For Petitioner: Aditya Pandey
Counsel For Respondent: C.S.C.
