# M/s Gobind Tobacco Manufacturing Co., Panipat (Haryana) & Anr v. State of U.P. & Ors

- **Citation:** (2022) 5 ILRA 1605
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-05-17
- **Case number:** Writ Tax No. 600 of 2022
- **Bench:** Surya Prakash Kesarwani, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-gobind-tobacco-manufacturing-co-panipat-haryana-anr-v-state-of-u-p-ors-48454
- **Pages:** 7

## Headnote

A. Civil Law - I.G.S.T. Act, 2017 -
Section 207 - C.G.S.T. Act, 2017 -
Section 129 (1) - Seizure of Goods and
Vehicle- Petitioner no. 1 dispatched the
consignment of Bijli Spit Tobacco to Nepal
from Panipat under Invoice dated 14.01.2022
through transporter Ankit Transport Service.
On same day petitioner no.01 generated EWay bill from the portal of Government of
India. Due to imposition of strict and rigid
condition imposed by Nepal Government for
entry in Nepal due to Covid 19 pandemic the
driver of the vehicle did not fulfill the
conditions so imposed. The goods were left
in godown of petitioner no. 02 for onward
transport to Nepal and by that time the
period specified in E-Way bill expired. The
petitioner no.02 arranged the vehicle and
generated E-Way bill on 26.05.2022 in
compliance of Rule 138 and 138-A. Thus,
there was no intention for evasion of tax.
Accordingly, seizure of good and vehicle is
illegal and arbitrary.

Writ Petition allowed. (E-12)

List of Cases cited:-

## Text

5 All. M/s Gobind Tobacco Manufacturing Co., Panipat (Haryana) & Anr. Vs. State of U.P. &
 Ors.
1605
assessing authority to be that of an honest
and prudent person who would act on
reasonable grounds and come to a cogent
conclusion. The reasons recorded were
totally unfounded and consequently the
jurisdictional notice under Section 148 of
the Act, 1961 issued by the assessing
authority was without jurisdiction. Once
the notice under Section 148 of the Act,
1961 issued by the assessing authority was
without
jurisdiction,
the
subsequent
proceedings, including re-assessment order,
cannot be sustained.

17. For all the reasons afore-stated,
the impugned notice dated 31.03.2021
under Section 148 of the Act, 1961 issued
by the respondent no.2, the order dated
09.03.2021 rejecting the objection of the
petitioner, the re-assessment order dated
31.03.2022 under Section 147 of the Act,
1961 for the Assessment Year 2013-14 and
the demand notice dated 31.03.2022 issued
under Section 156 of the Act, 1961 cannot
be sustained and are hereby quashed.

18. For all the reasons aforestated, the
writ petition is allowed with cost of
Rs.5000/-, which the respondents shall
deposit with the High Court Legal Services
Committee, High Court, Allahabad within
three weeks from today, failing which the
amount shall be recovered as fine.
----------
(2022)05ILR A1605
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.05.2022

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE JAYANT BANERJI, J.

Writ Tax No. 600 of 2022
M/s Gobind Tobacco Manufacturing Co.,
Panipat (Haryana) & Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Aloke Kumar

Counsel for the Respondents:
C.S.C.

A. Civil Law - I.G.S.T. Act, 2017 -
Section 207 - C.G.S.T. Act, 2017 -
Section 129 (1) - Seizure of Goods and
Vehicle- Petitioner no. 1 dispatched the
consignment of Bijli Spit Tobacco to Nepal
from Panipat under Invoice dated 14.01.2022
through transporter Ankit Transport Service.
On same day petitioner no.01 generated EWay bill from the portal of Government of
India. Due to imposition of strict and rigid
condition imposed by Nepal Government for
entry in Nepal due to Covid 19 pandemic the
driver of the vehicle did not fulfill the
conditions so imposed. The goods were left
in godown of petitioner no. 02 for onward
transport to Nepal and by that time the
period specified in E-Way bill expired. The
petitioner no.02 arranged the vehicle and
generated E-Way bill on 26.05.2022 in
compliance of Rule 138 and 138-A. Thus,
there was no intention for evasion of tax.
Accordingly, seizure of good and vehicle is
illegal and arbitrary.

Writ Petition allowed. (E-12)

List of Cases cited:-

1. Assistant Commissioner(ST) & ors. Vs M/s
Satyam Shivam Papers Pvt. Ltd. & anr. Special
Leave to Appeal No. 21132 of 2021(Decided on
12.01.2022)
(Delivered by Hon'ble Surya Prakash
Kesarwani, J.
&
Hon'ble Jayant Banerji, J.)

1. Heard Shri Aloke Kumar, learned
counsel for the petitioners and Shri Nimai
1606 INDIAN LAW REPORTS ALLAHABAD SERIES
Das, learned Additional Chief Standing
Counsel for the State-respondents.

2. This writ petition has been filed
praying for the following reliefs:-

"(i) Issue a suitable writ, order or
direction in the nature of certiorari
quashing the Detention/ Seizure Order
dated 07.03.2022 [Annexure no. 13 to the
writ petition] passed by respondent no. 3
under Section 20 of the IGST Act read with
section 129 (1) of the CGST Act.

(ii) Issue a suitable writ, order or
direction in the nature of certiorari
quashing the Order of release dated
13.03.2022 [Annexure no. 16 to the writ
petition] passed by respondent no. 3 under
Section 20 of the IGST Act read with
section 129 (3) of the CGST Act.

(iii) Issue a suitable writ, order or
direction in the nature of certiorari
quashing the Notices dated 22.03.2022 and
28.03.2022 [Annexure no. 18 and 20 to the
writ petition] issued by respondent no. 3.

(iv) Issue a suitable writ, order or
direction in the nature of mandamus
commanding the respondent no.3 to release
the goods and vehicle no. UP65BT/2241 so
seized/
detained
vide
Order
dated
07.03.2022.

(v) Issue any other suitable writ,
order or direction in favor of the petitioner
as this Hon'ble High Court may deem fit
and
proper
under
the
facts
and
circumstances of the case.

(vi) Award the cost of the petition
to the petitioner."

3. This writ petition was heard at
length on 21.04.2022 and a detailed order
was passed. The matter was again heard on
29.04.2022 and 06.05.2022. Counter and
rejoinder affidavits have been exchanged
between the parties.

4. Petitioner no.1 is the partnership
concern engaged in manufacture and sale
of tobacco products and is registered under
the provisions of The Central Goods &
Service Tax Act, 2017 (hereinafter referred
to as the 'CGST Act') having GSTIN
06AABFG2788A1ZQ
at
Panipat
(Haryana).
Petitioner
no.2
is
a
proprietorship
concern
engaged
in
transportation of goods and is registered
under the CGST Act as a service provider
having GSTIN 09ACIPY7858G2ZO at
Gorakhpur. The aforesaid facts stated in
paragraphs 4 and 5 of the writ petition have
not been denied by the respondent no.3 in
the counter affidavit dated 05.05.2022.

5. In paragraph 6 of the writ
petition, it has been stated that the goods
manufactured by petitioner no.1 are usually
consumed in Nepal which he used to
export to Nepal covered under the letter
of undertaking for export of excisable
goods without payment of duty under
Notification No.42/2001- CE(N.T.) dated
26.06.2001. In paragraph 7 of the writ
petition, it has been stated that in the
course
of
business,
petitioner
no.1
dispatched the consignment of BIJLI SPIT
TOBACCO packed in 200 boxes valuing
Rs.7,20,000/- covered under the invoice
no.51/2021-22/GTMC dated 14.01.2022 to
Lumbini Traders, Krishna Nagar, Nepal,
through the transporter namely, Ankul
Transport Service. In paragraphs 8 and 9, it
has been stated that HSN code of the
commodity
meant
for
export
was
mentioned on the aforesaid invoice, and
that the digits of tariff mentioned therein
are required to be mentioned only when the
commodity is subject matter of export. In
paragraph 10 of the writ petition, it has
been stated that in the invoice it was
specifically mentioned that "Export to
Nepal Goods dispatched under LUT
5 All. M/s Gobind Tobacco Manufacturing Co., Panipat (Haryana) & Anr. Vs. State of U.P. &
 Ors.
1607
ARN
No.AD0603210027240
DTD.
06/03/2021" and the copy of LUT was
attached with the invoice for the purpose of
transshipment to Nepal. In paragraph 11
of the writ petition, it has been stated that
the invoice issued for the goods was in
accordance with the condition prescribed in
Tariff Code-24039910. In paragraph 12, it
has been stated that the petitioner no.1 got
generated E-way Bill No.3414 0160 4901
from the portal of Government of India on
14.01.2022 at 3:09 P.M. for the goods in
question by giving the reference of invoice.

6. The aforestated paragraphs 6, 7, 8,
9, 10, 11 and 12 of the writ petition have
been replied by the respondent no.3 in
paragraph 31 of the counter affidavit as
under :-

"31.
That
the
contents
of
paragraph nos.6, 7, 8, 9, 10, 11 & 12 of the
writ petition do not call for any reply and
comments being matter of record be
verified therefrom."
7. In paragraphs 14, 15, 16 and 17 of the
writ petition, the petitioners have stated as
under :-

"14. That as the Government of
Nepal after opening its border (which
was sealed in March 2020 with India)
imposed conditions of 7 days quarantine
and the visitors are allowed only after 14
days from the date of having last dose of
COVID-19 vaccine and as the driver of
the vehicle does not fulfill the conditions
required for entry in Nepal thus he left
the goods in the godown of petitioner no.
2 situated at Gida, Gorakhpur for
further transshipment by another vehicle
to Nepal. In support of the above said
submission the petitioner is bringing on
record
a
news
report
published
in
Kathmandu Post. A true/photo copy of the
news report as published in Kathmandu
Post is being filed herewith and marked as
Annexure No.8 to this writ petition.

15. That as the quantity of the
goods of the petitioner is not a full truck
load further limited drivers are available
intended to transport goods in Nepal
thus the period specified in E-way bill
expired.

16. That the expiry of period of
E-way bill is beyond the control of the
petitioner and is not a deliberate act of
the petitioner in fact the same is bona
fide.

17. That under the above said
specific
circumstances
the
goods
in
question can only be transported to Nepal,
when the vehicle is available and in the
instant
case
the
petitioner
no.
2
ultimately arranged the vehicle no. UP
65 BT 2241 and issued GR No. 635 dated
26.02.2022 for the goods in question and
for the purpose of compliance of the
provisions of rule 138 and 138A being
transporter generated E-way bill no.
4712 3392 2443 on 26.02.2022 itself by
giving the details of the documents. A
true/photo copy of the GR No. 635 dated
26.02.2022 and E-way bill no. 4712 3392
2443 are being filed herewith and marked
as Annexure No.9 and 10 to this writ
petition.

8. The aforequoted paragraphs 14, 15,
16 and 17 of the writ petition have been
replied
by
the
respondent
no.3
in
paragraphs 33, 34 and 35 of the counter
affidavit in which he has not specifically
denied the contents of the aforesaid
paragraphs of the writ petition. Thus, the
averment of facts made in paragraphs 14,
15 and 16 of the writ petition stands
admitted to the respondents. What has
been stated in the counter affidavit while
replying the aforesaid paragraphs of the
writ petition is that the petitioners being
1608 INDIAN LAW REPORTS ALLAHABAD SERIES
aware of the COVID-19 pandemic
situation, should not have export the
goods and, instead of getting generated
the second e-way bill, should have got
extended the validity of the e-way bill
within 8 hours of its expiry as per the
provisions
of
Rule
138(10)
of
the
CGST/IGST Rules.

9. In paragraph 22 of the writ
petition, the petitioners have stated that
"there is no intention of evasion of tax
and the goods in question are covered by
documents required to be carried as per
the provisions of Rule 138(A)." In
paragraph 27 of the writ petition, the
petitioner no.2 has stated that "he was of
the bonafide opinion that the place of
dispatch is required to be disclosed from
Panipat as the goods had originally
originated
from
Panipat
not
from
Gorakhpur". In paragraph 28 of the writ
petition, it has been stated that the
petitioner no.2 had generated e-way bill on
26.02.2022 indicating the said invoice as
bill of supply bonafidely and in doing so
there is no intention of evasion of tax. The
contents of aforesaid paragraphs of the
writ petition have been replied by the
respondents in paragraphs 37 and 38 of
the counter affidavit in which the facts so
stated have not been specifically denied
at all.

10. In paragraph 43 of the writ
petition, the petitioners have stated that
they have sent the objection through speed
post but no order or notice fixing any other
date has been communicated to them. In
paragraph 44 of the writ petition, the
petitioners have stated that they cannot be
punished for the mistake occasioned
bonafidely under the specific condition
imposed by the Government of Nepal for
entry
due
to
COVID-19.
These
paragraphs 43 and 44 have been replied
in paragraph 40 of the counter affidavit
in which the facts as aforementioned
have not been specifically denied by the
respondents.

11. In paragraphs 46, 47 and 48 of
the writ petition, the petitioners have
stated that the respondent no.3 had issued
notice dated 28.02.2022 in the form of an
order in arbitrary exercise of his power and
ordered
for
deposit
of
more
than
Rs.1,00,000/- for release of the vehicle and
while issuing the said notice directed to
deposit Rs.3,00,000/- as against the outer
limit of Rs.1,00,000/- fixed by the Statute.
In paragraphs 50, 51 and 52 of the writ
petition, the petitioners have made detailed
and pointed specific averments that neither
there was any intention of evasion of tax
nor have they committed any default nor a
sum
of
Rs.27,07,200/-
could
have
demanded for release of goods nor the
goods could be confiscated. It has further
been
specifically
stated
that
the
transaction in question was covered by
IGST Act. These paragraphs have been
replied in paragraphs 42, 43, 44 and 45
of the counter affidavit in which there is
no specific denial.

12. Thus, from the facts as may be
ascertained from the averments made by
the parties in the writ petition and the
counter affidavit, it is admitted to the
parties that the goods in question originated
from Panipat and were being transported
with valid invoice from Panipat to Nepal
but due to restriction imposed on account
of COVID-19 pandemic, as specifically
mentioned in paragraphs 14, 16, 17, 27 and
28 of the writ petition, the goods were
unloaded at Gorakhpur and after the
arrangement of another vehicle was made
under prevailing situation of COVID-19
5 All. M/s Gobind Tobacco Manufacturing Co., Panipat (Haryana) & Anr. Vs. State of U.P. &
 Ors.
1609
pandemic, the goods were transported to
Nepal. Since the time gap was much,
therefore,
a second e-way bill was
generated so that the goods may reach to its
destination at Nepal. There is absolutely no
dispute that the goods in question were
dispatched by the petitioner no.1 from
Panipat (Haryana) under valid invoice and
valid papers. The goods in question were
intercepted and seized by the respondents
on
hyper-technical
ground
and
assumptions, without there being any
allegation of intention to evade payment of
tax. The second e-way bill was generated
bonafidely and in circumstance beyond
control of the petitioners. The averments of
the petitioners in paragraph No.16 of the
writ petition that generating the second eway bill was totally bonafide, has also not
been denied by the respondents. Since the
goods were covered by valid documents,
therefore, it could not have been detained
or seized and hence the entire proceedings
were totally arbitrary, illegal and without
jurisdiction. The action of the respondents
in seizing the goods in question is evidently
an act of harassment to the petitioners,
breach
of
their
fundamental
rights
guaranteed under Article 14 of the
Constitution of India and blatant abuse of
power by the respondents.

13. In the case of Assistant
Commissioner (ST) & Ors. vs. M/s
Satyam Shivam Papers Pvt. Limited &
Anr. (Special Leave to Appeal No.21132
of 2021, decided on 12.01.2022, Hon'ble
Supreme Court held as under:-

"Having heard learned counsel
for the petitioners and having perused the
material placed on record, we find no
reason to consider interference in the wellconsidered and well-reasoned order dated
2nd June, 2021, as passed by the the High
Court for the State of Telangana at
Hyderabad in Writ Petition No. 9688 of
2020. Rather, we are clearly of the view
that the error, if any, on the part of the
High Court, had been of imposing only
nominal costs of Rs. 10,000/- (Rupees
Ten Thousand) on the respondent No. 2
of the writ petition, who is petitioner
No.2 before us.

The consideration of the High
court in the order impugned and the
material placed on record leaves nothing
to doubt that the attempted inference on
the part of petitioner No.2, that the writ
petitioner was evading tax because the eway bill had expired a day earlier, had
not only been baseless but even the intent
behind the proceedings against the writ
petitioner
was
also
questionable,
particularly when it was found that the
goods in question, after being detained
were, strangely, kept in the house of a
relative of the petitioner No.2 for 16 days
and not at any other designated place for
their safe custody.

The High Court has, inter alia,
found that:

"41. ........ It was the duty of 2nd
respondent to consider the explanation
offered by petitioner as to why the goods
could not have been delivered during the
validity of the e-way bill, and instead he is
harping on the fact that the e-way bill is
not extended even four(04) hours before
the expiry or four(04) hours after the
expiry, which is untenable.

The 2nd respondent merely states
in the counter affidavit that there is clear
evasion of tax and so he did not consider
the said explanations.

This is plainly arbitrary and
illegal and violates Article 14 of the
Constitution of India, because there is no
denial by the 2nd respondent of the traffic
blockage at Basher Bagh due to the anti
1610 INDIAN LAW REPORTS ALLAHABAD SERIES
CAA and NRC agitation on 4.01.2020 up to
8.30 pm preventing the movement of auto
trolley for otherwise the goods would have
been delivered on that day itself. He also
does not dispute that 04.01.2020 was a
Saturday, 05.01.2020 was a Sunday, and the
next working day was only 06.01.2020."

The High Court has further found
and, in our view, rightly so thus:

"42. How the 2nd respondent
could have drawn an inference that
petitioner is evading tax merely because
the e-way bill has expired, is also nowhere
explained in the counter- affidavit.

In our considered opinion, there
was
no
material
before
the
2nd
respondent to come to the conclusion that
there was evasion of tax by the petitioner
merely on account of lapsing of time
mentioned in the e-way bill because even
the 2nd respondent does not say that there
was any evidence of attempt to sell the
goods to somebody else on 06.01.2020.
On account of non-extension of the
validity of the e-way bill by petitioner
or
the
auto
trolley
driver,
no
presumption can be drawn that there
was an intention to evade tax".

The
High
Court
has
also
commented on blatant abuse of the power
by
the
petitioner
No.2
and
has
deprecated his conduct in the following
words:

"43. We are also unable to
understand why the goods were kept for
safe
keeping
at
Marredpally,
Secunderabad in the House of a relative
of 2nd respondent for (16) days and not
in any other place designated for such
safe keeping by the State.

44. In our opinion, there has
been a blatant abuse of power by the 2nd
respondent
in
collecting
from
the
petitioner tax and penalty both under the
CGST and SGST and compelling the
petitioner to pay Rs.69,000/- by such
conduct.

45. We deprecate the conduct of
2nd respondent in not even adverting to the
response given by petitioner to the Form
GST MOV-07 in Form GST MOV-09 and
his deliberate intention to treat the validity
of the expiry on the e-way bill as
amounting to evasion of tax without any
evidence of such evasion of tax by the
petitioner."

Having said so, the High Court
has set aside the levy of tax and penalty of
Rs. 69,000/- (Rupees Sixty-nine Thousand)
while imposing costs of Rs. 10,000/-
(Rupees Ten Thousand), payable by the
petitioner No.2 to the writ petitioner
within four weeks.

The analysis and reasoning of the
High Court commends to us, when it is
noticed
that
the
High
Court
has
meticulously examined and correctly found
that no fault or intent to evade tax could
have been inferred against the writ
petitioner. However, as commented at the
outset, the amount of costs as awarded by
the High Court in this matter is rather
on the lower side. Considering the overall
conduct of the petitioner No.2 and the
corresponding harassment faced by the writ
petitioner we find it rather necessary to
enhance the amount of costs.

Upon our having made these
observations, learned counsel for the
petitioners has attempted to submit that the
questions of law in this case, as regards the
operation and effect of Section 129 of
Telangana Goods and Services Tax Act,
2017 and violation by the writ petitioner,
may be kept open. The submissions sought
to be made do not give rise to even a
question of fact what to say of a question of
law. As noticed hereinabove, on the facts of
this case, it has precisely been found that
there was no intent on the part of the
5 All. Ashok Kumar Kesarwani Vs. 6th Additional District Judge Court No. 5, Allahabad & Ors. 1611
writ petitioner to evade tax and rather,
the goods in question could not be taken
to the destination within time for the
reasons beyond the control of the writ
petitioner. When the undeniable facts,
including the traffic blockage due to
agitation, are taken into consideration, the
State alone remains responsible for not
providing smooth passage of traffic.

Having said so; having found no
question of law being involved; and having
found this petition itself being rather misconceived , we are constrained to enhance
the amount of costs imposed in this matter
by the High Court.

The High Court has awarded
costs to the writ petitioner in the sum of
Rs. 10,000/- (Rupees Ten Thousand) in
relation to tax and penalty of Rs.69,000/-
(Rupees Sixty-nine Thousand) that was
sought to be imposed by the petitioner
No.2. In the given circumstances, a
further sum of Rs. 59,000/- (Rupees
Fifty-nine Thousand) is imposed on the
petitioners toward costs, which shall be
payable to the writ petitioner within four
weeks from today. This would be over
and above the sum of Rs. 10,000/-
(Rupees Ten Thousand) already awarded
by the High Court.

Having
regard
to
the
circumstances, we also make it clear that
the State would be entitled to recover the
amount of costs, after making payment
to the writ petitioner, directly from the
person/s responsible for this entirely
unnecessary litigation.

This petition stands dismissed,
subject to the requirements foregoing.

Compliance to be reported by the
petitioners."

(emphasis supplied by us)

14. Applying the law laid down by
Hon'ble Supreme Court in the case of
Satyam Shivam Papers Pvt. Ltd. (supra) on
the facts of the present case, the writ
petition deserves to be allowed with cost.

15. For all the reasons aforestated, the
impugned
detention
order
dated
07.03.2022,
the
release
order
dated
13.03.2022 and notices dated 22.03.2022
and 28.03.2022, are hereby quashed being
totally arbitrary and illegal. The goods and
vehicle
in
question
seized
by
the
respondents are directed to be released
forthwith.

16. The writ petition is, accordingly,
allowed with cost of Rs.50,000/- to each
of the petitioners, i.e. total Rs.1,00,000/-
which the respondents shall pay the
petitioners within four weeks from today.
----------
(2022)05ILR A1611
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 01.04.2022

BEFORE

THE HON'BLE J.J. MUNIR, J.

Matters U/A 227 No. 872 of 2019 (Civil)

Ashok Kumar Kesarwani ...Petitioner
Versus
6th Additional District Judge Court No. 5,
Allahabad & Ors. ...Respondents

Counsel for the Petitioner:
Sri Vishal Khandelwal, Sri Prakash Chandra
Gupta

Counsel for the Respondents:
Sri
Prem
Sagar
Verma,
Sri
Arvind
Srivastava, Sri Kunal Shah, Sri Madan
Mohan