# M/s Jaya Traders v. Addl. Commissioner Grade-II & Anr

- **Citation:** (2025) 3 ILRA 253
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-03-03
- **Case number:** Writ Tax No. 1022 of 2021
- **Bench:** Piyush Agrawal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-jaya-traders-v-addl-commissioner-grade-ii-anr-53050
- **Pages:** 11

## Headnote

Civil Law - Goods and Services Tax Act,
2003-Sections 31 &129-Once the petitioner
has failed to prove the true/ actual movement of
the goods from West Bengal / Assam to Delhi,
the seizure proceedings cannot be said to be
unjustified-therefore, accompanying tax invoices
and other documents cannot said to be
genuine-glaring example of organized tax
evasion- Sec 129 of the GST Act -any
person
transports
any
goods
-
in
contravention of the Act - liable to be
detained or seized- tax invoice has to be
issued in terms of Section 31 of the Act, -
intentionally undervalued the goods to
take wrong advantage of Rule 138 which
dispense the requirement of e-way bill
accompany
the
goods-
the
seizure
proceedings
cannot
be
said
to
be
unjustified.

W.P. dismissed. (E-9)

List of Cases cited:

## Text

3 All. M/s Jaya Traders Vs. Addl. Commissioner Grade-II & Anr.
253
date of production of certified copy of this
order.

(20) It is made clear that this Court
has not expressed any opinion on the
merits of the present case in any manner
and it is open for the parties to agitate
their rights and liabilities, if any, before
the competent authority, as may be
permissible under law.

(21) The writ petition stands allowed.
----------
(2025) 3 ILRA 253
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 03.03.2025

BEFORE

THE HON'BLE PIYUSH AGRAWAL, J.

Writ Tax No. 1022 of 2021
With
Writ Tax No. 1019 of 2021
With
Writ Tax No. 1020 of 2021
With
Writ Tax No. 1021 of 2021
With
Writ Tax No. 1023 of 2021

M/s Jaya Traders ...Petitioner
Versus
Addl. Commissioner Grade-II & Anr.
 ...Respondents

Counsel for the Petitioner:
Aditya Pandey

Counsel for the Respondents:
C.S.C.

Civil Law - Goods and Services Tax Act,
2003-Sections 31 &129-Once the petitioner
has failed to prove the true/ actual movement of
the goods from West Bengal / Assam to Delhi,
the seizure proceedings cannot be said to be
unjustified-therefore, accompanying tax invoices
and other documents cannot said to be
genuine-glaring example of organized tax
evasion- Sec 129 of the GST Act -any
person
transports
any
goods
-
in
contravention of the Act - liable to be
detained or seized- tax invoice has to be
issued in terms of Section 31 of the Act, -
intentionally undervalued the goods to
take wrong advantage of Rule 138 which
dispense the requirement of e-way bill
accompany
the
goods-
the
seizure
proceedings
cannot
be
said
to
be
unjustified.

W.P. dismissed. (E-9)

List of Cases cited:

1. S/s S.K. Trading Co. & anr. Vs Additional
Commissioner Grade -2 (Appeal) & anr.(Writ Tax
No. 1464 of 2022)

2. M/s Maa Aabe Vs St. of UP, Neutral Citation
No. 2024: AHC: 158372-DB

3. M/s Shamhu Saran Agarwal & Co.Vs
Additional Commissioner Grade -2, Neutral
Citation No. 2024:AHC:15975.

4. K.P. Sugandh Ltd. Vs St. of Chhattisgarh,
2020 NTN (Vol. 74) 372

5. Best Sellers (Cochin) Pvt. Ltd. Vs Assistant St.
Tax Officer, 2021 NTN (Vol 75) -360

6. Sameer Mat Industries & anr. Vs St. of Kerala
& ors., 2018 NTN (vol 66) -69

7. M/s Ghata Mehandipur Balaji Grinding Works
Pvt. Ltd. Vs Commissioner Commercial Tax, UP
Govt. Lucknow (Trade Tax Revision No. 15 of
2014) decided on 25.3.2014

8. St. of Karn. Vs M/s Ecom Gill Coffee Trading
Pvt. Ltd. (Civil Appeal No. 230 of 2023) decided
on 13.3.2023

9. M/s Shiv Trading Vs St. of U.P. & ors. (Writ
Tax No. 1421 of 2022) decided on 28.11.2023

10. M/s Radha Fragrance Vs U.O.I.& ors. (Writ
tax No. 427 of 2019)
254 INDIAN LAW REPORTS ALLAHABAD SERIES
11. Shakti Trading Comp. Vs St. of U.P. & ors.
(Writ Tax No. 756 of 2011) decided on
24.5.2011

(Delivered by Hon'ble Piyush Agrawal, J.)

1. Heard Mr. Aditya Pandey, learned
counsel for the petitioner and Mr. Ravi
Shanker Pandey, learned Additional Chief
Standing Counsel for the State-respondents.

2. Similar controversy is involved in
all the writ petitions, therefore, with the
consent of the parties, all the aforesaid writ
petitions are being decided by a common
judgement treating Writ Tax No. 1022 of
2021, as leading case.

Writ Tax No. 1022 of 2021

3. By means of this writ petition, the
petitioner is assailing the order dated
25.10.2021 passed by respondent no. 1 in
Appeal No. GST/110/2020-21 (A.Y. 202122) under Section 129 (3) of IGST/CGST
Act.

4. Learned counsel for the petitioner
submits that petitioner is a proprietorship
firm
having
GSTIN
No.
18BPUPT4581B1ZB and is engaged in the
business of trading of pan masala and
scented tobacco. He submits that 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
dated 15.9.2021 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 nos. 41 to 45 dated
15.9.2021, 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 wherein 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. He submits
that the goods were seized on the ground of
under valuation, which is beyond the power
of the detaining / seizing authority. He
submits that against the penalty order, an
appeal was filed, which has been dismissed
without considering the material on record.

5. He submits that the authorities have
misperceived certain facts, which are
beyond
the
record.
In
the
seizure
proceeding under Section 129 of the Act,
the authority cannot seize the goods on the
ground of under valuation.

6. In support of his contention, he
relied upon the judgements of this Court in
the following cases :-

(i) S/s S.K. Trading Co. and
another Vs. Additional Commissioner
Grade -2 (Appeal) and another (Writ
Tax No. 1464 of 2022) decided on
16.3.2023,

(ii) M/s Maa Aabe Vs. State of
UP, Neutral Citation No. 2024: AHC:
158372 -DB

(iii)
M/s
Shamhu
Saran
Agarwal and company Vs. Additional
Commissioner
Grade
-2,
Neutral
Citation No. 2024:AHC:15975.
3 All. M/s Jaya Traders Vs. Addl. Commissioner Grade-II & Anr.
255

7.
He
further
relied
upon
the
judgements of other High Court :-

(i) Chhattisgarh High Court in the
case of K.P. Sugandh Ltd. Vs. State of
Chhattisgarh, 2020 NTN (Vol. 74) 372;

(ii) Kerala High Court in Best
Sellers
(Cochin)
Private
Ltd.
Vs.
Assistant State Tax Officer, 2021 NTN
(Vol 75) -360 and Sameer Mat Industries
and another Vs. State of Kerala and
others, 2018 NTN (vol 66) -69.

8. Per contra, learned Additional
Chief Standing Counsel supports the
impugned order and submits that it is
simply a case of tax evasion. He submits
that goods were detained and seized not
only on the ground of under valuation but
also on the ground of non-genuine
documents accompanying with the goods.
He submits that on perusal of the
documents accompanying with 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.

9. He further submits that petitioner
has failed to bring any material on record,
even before this Court, in order to prove
that the actual movement of the goods
started from West Bengal / Assam. He
further submits that neither any truck
number nor any toll receipt has been
mentioned/ shown at any stage of the
proceeding to prove that actual movement
of the goods had taken place from West
Bengal / Assam, however when the vehicle
was detained at Kanpur then on physical
verification, the movement of the goods
was not found genuine, therefore, the
proceedings were rightly initiated.

10. He further submits that the
petitioner has utterly failed to bring on
record any cogent material in order to
prove the movement of the goods in
question from West Bengal / Assam to
Delhi. He further submits that the statement
of Driver has not been rebutted at any stage
of the proceedings.

11. In support of his submission,
learned
ACSC
has
relied
upon
the
judgement of this Court in the case of M/s
Ghata Mehandipur Balaji Grinding
Works Pvt. Ltd. Vs. Commissioner
Commercial Tax, UP Govt. Lucknow
(Trade Tax Revision No. 15 of 2014)
decided on 25.3.2014.

12.
Rebutting
to
the
aforesaid
submission,
learned
counsel
for
the
petitioner submits that even assuming
without admitting that the goods were
loaded from Kanpur, still, no adverse
inference can be drawn against the
petitioner on the ground of under valuation.

13. After hearing learned counsel for
the parties, the Court has perused the
records.

14. It is admitted between the parties
that
the
goods
in
question
was
accompanying with the tax invoice and
cross challan but on the statement of the
truck driver that the goods were loaded
from Kanpur, the proceedings have been
initiated. The accompanying document
shows the movement of the goods from
West Bengal / Assam to Delhi, whereas in
the statement of the truck driver the goods
were loaded at Kanpur. The record further
shows that the petitioner had neither
submitted any reply nor contradicted the
statement made by the truck driver.
256 INDIAN LAW REPORTS ALLAHABAD SERIES

15. It is also admitted that the goods in
question was manufactured at Kanpur. In
order to prove the genuineness of the
document accompanying with the goods,
the petitioner was required to complete the
chain i.e. the truck / vehicle number on
which the goods were transported from
West Bengal / Assam, toll receipts of the
toll plazas crossed during its journey up to
Kanpur.

16. The record further shows that the
petitioner has utterly failed to bring on
record the actual movement of the goods
from the West Bengal / Assam to Kanpur.
For claiming the genuineness of the
document, the petitioner was duty bound to
spell out the detail of mode of transport as
well as details of vehicle used for
transportation of the goods in question up
to Kanpur. In the absence of any detail
being furnished by the petitioner, the
proceedings cannot be said to be illegal.

17. The record further shows that
while issuing MOV-7, findings have been
recorded, which are quoted hereunder :-

"वाहन चालक द्वारा दिये गये सशपथ बयान माल
के भौदतक सत्यापन एवां प्रपत्रों की जाांच के आधार पर
दनम्नदलदखत प्रदतकूल दबन्िुओां पर स्पष्टीकरण अपेदक्षत हैैः-
पररवहन के समय चेजकिंग पर प्रस्ट्तुत प्रपत्रों के अनुसार
माल का पररवहन असम व पजिम बिंगाल से जदल्ली हेतु
जकया िा रहा है िबजक वाहन चालक द्वारा सशपथ बयान
में स्ट्वीकार जकया गया है जक प्रश्नगत माल उनके द्वारा
दादानगर, कानपुर नगर से लोड जकया गया है। उल्लेखनीय
है जक भौजतक सत्यापन में प्रश्नगत माल गगन ब्ािंड पान
मसाला एविं सेन्टेड िदाा के पाउच पर कानपुर के
जनमााणकताा फमा सवाश्री ग्रीन्सवथा इण्टरप्राइिेि प्रा० जल०
(GSTIN-09AAJCG0608CIZZ) पता-C9, A/2,
A-5
AND
A-6
SIDE-1,
PANKI
INDUSTRIAL AREA, KANPUR NAGAR
अिंजकत पाया गया है जिससे स्ट्पष्ट है जक प्रश्नगत माल का
जनमााण कानपुर में ही जकया गया है। इस सम्बन्ध में माल
के पररवहन में प्रयुक्त वाहन की EWAY OFFICER
APP पर VEHICLE PASSAGE DETAIL
चेक जकये िाने पर प्रश्नगत वाहन को इन जतजथयों में
पजिम बिंगाल व असम से कानपुर आना प्रदजशात नहीं
पाया गया। उपयुाक्त तथ्यों के आधार पर यह स्ट्पष्ट है जक
कानपुर में जनजमात माल पान मसाला एविं सेन्टेड िदाा को
कानपुर से प्रश्नगत वाहन में लोड कर पजिम बिंगाल एविं
असम की फमों द्वारा िारी कूटरजचत प्रपत्रों के आधार पर
जदल्ली की फमो को आपूजता जदखाते हुए उत्तर प्रदेश माल
एविं सेवा कर अजधजनयम/केन्रीय माल एविं सेवा कर
अजधजनयम/एकीकृत माल एविं सेवाकर अजधजनयम 2017
के सुसिंगत प्रावधानों का उल्लिंघन करते हुए करापविंचन की
मिंशा से माल का पररवहन जकया िा रहा है।"
(Emphasis supplied by this Court)

18. Further while passing the order in
MOV-6 following findings have been
noted:-

"8. माल के स्वामी द्वारा प्रस्तुत आपदि का
अवलोकन दकया गया दजसे दनम्न कारणों से स्वीकार/अस्वीकार
दकया जाता है। जारी नोदटस के क्रम में दवक्रेता फमा सवाश्री जया
ट्रेडसा असम (GSTIN- 18BPUPT4581B1ZB) के
अदधकृत प्रदतदनदध श्री अदमत कुमार पुत्र श्री राम गोपाल,
दनवासी- 133P/105, ट्राांसपोटा नगर, कानपुर नगर उपदस्थत
हुए एवां फमा की तरफ से जारी अदधकार पत्र, फमा का REG-
06 एवां नोदटस का दलदखत उिर िादखल करते हुये 60 बैग
गगन पान समाला एवां 15 बैग गगन सेन्टेड जिाा माल के
स्वादमत्व का िावा प्रस्तुत दकया। दलदखत उिर के दबन्िु सां०-1
में जवक्रेता फमा द्वारा प्रश्नगत माल के स्ट्वाजमत्व का दावा
तो प्रस्ट्तुत जकया गया है, जकन्तु नोजटस में उठाए गए जबन्दु
जक प्रश्नगत माल कानपुर में ही जनजमात है एविं वाहन चालक
के सशपथ बयान के अनुसार कानपुर से ही लोड जकया
गया है, के सम्बन्ध में कोई उत्तर दाजखल नही जकया गया
है। कानपुर में जनजमात माल को कानपुर से लोड कर असम
में जस्ट्थत फमा द्वारा जदल्ली की फमा हेतु िारी इनवाइस के
आधार पर माल को पररवजहत क्यों जकया िा रहा है, इस
जबन्दु पर उत्तर प्रस्ट्तुतकताा मौन हैं, िो जक प्रश्नगत फमा के
कानपुर के नॉन बोनाफाईड डीलर के साथ दुरजभ सिंजध कर
छद्म/कुटरजचत प्रपत्रों का प्रयोग करते हुए करापविंचन की
मिंशा से माल का पररवहन जकए िाने की पुजष्ट करता है।
िादखल उिर के दबन्िु सां०-2 में कहा गया है दक माल प्रपत्रों के
3 All. M/s Jaya Traders Vs. Addl. Commissioner Grade-II & Anr.
257
अनुसार है एवां कोई दभन्नता नहीं है। जारी नोदटस में इांदगत तथ्य
दक प्रश्नगत माल के भौदतक सत्यापन में माल के कानपुर की
दनमााणकताा फमा सवाश्री ग्रीन्सवथा इण्टरप्राइजेज प्रा०दल०
(GSTIN-09AAJCG0608CIZZ) पता-C9, A/2,
A-5
AND
A-6
SIDE-1,
PANKI
INDUSTRIAL AREA, KANPUR NAGAR द्वारा
दनदमात होने तथा माल को कानपुर से ही लोड दकये जाने के
तथ्य, के साथ यह भी इांदगत दकया गया है दक प्रश्नगत मामले में
सुदनयोदजत ढांग से वास्तदवक मूल्य से कम मूल्य घोदषत करते
हुए कुछ इस प्रकार टैक्स इनवाइस जारी की जा रही है दक
क्रेता फमा को रू० 50000.00 मूल्य से अदधक मूल्य के माल
की आपूदता भी हो जाए एवां सी०जी०एस०टी० रूल 2017 के
दनयम 138 के प्रावधानों का उल्लांघन भी न होने पाए। अतैः
माल की मात्रा तो प्रपत्रों के अनुसार अवश्य है, दकन्तु प्रपत्रों मे
की गई घोषणा के दवपरीत न तो प्रश्नगत माल को असम से
लोड दकया गया है एवां न ही प्रश्नगत माल प्रस्तुत टैक्स इनवाइस
के मूल्य से आच्छादित है। इस प्रकार के छद्म/कूटरदचत प्रपत्रों
की रचना करते हुए प्रश्नगत वाहन में लोड माल की मात्रा भी
प्रपत्रों के अनुसार सुदनदित करना दवक्रेता फमा की करापवांचना
की दवदध (MODUS OPERANDI OF TAX
EVASION) को स्पष्ट करता है तथा उनके द्वारा
यू०पी०जी०एस०टी०/सी०जी०एस०टी० एक्ट 2017 के सुसांगत
प्रावधानों का उल्लांघन करते हुए करापवांचन की मांशा को
प्रमादणत करता है।"
(Emphasis supplied by this Court)

19. The record further shows that
finding of facts recorded by the respondent
authority against the petitioner have not
specifically been assailed in the appeal
filed by the petitioner. On perusal of the
grounds of appeal annexed as Annexure
No. 5 of the writ petition, which runs from
paragraph no. 1 to 20, it shows that in none
of the grounds, any detail of vehicle or
mode of transport has been whispered in
order to explain as to how the goods were
moved from West Bengal / Assam to
Kanpur. Once the findings of fact recorded
against the petitioner have not been
assailed in the appeal, the proceedings
cannot be said to be illegal or arbitrary in
any manner.

20. The petitioner harped that the
proceeding is illegal only on the ground of
under valuation but in the present case, the
goods were not only detained and seized on
the basis of under valuation but also on the
statement of the truck driver that the goods
were loaded from Kanpur whereas the
documents accompanying the goods shows
that it was being transported from West
Bengal / Assam.

21. Under the taxing statute, in the
original proceeding or in the summary
proceeding, the primary burden is to be
discharged by the assessee by bringing on
record the cogent material. The burden of
proof is shifting to the department only in
the re-assessment proceeding or subsequent
proceeding
not
being
the
original
proceeding. In other words, the assessee in
the original proceeding is duty bound to
bring the material on record in support of
its claim but in the subsequent proceeding
i.e. re-assessment proceedings, the burden
shifts on the revenue.

22. In the present case, the petitioner
has utterly failed to bring on record any
cogent material for transporting the goods
from West Bengal / Assam to Delhi via
Kanpur. Once the petitioner has failed to
prove the true/ actual movement of the
goods from West Bengal / Assam to Delhi,
the seizure proceedings cannot be said to be
unjustified.

23. The Hon'ble Apex Court in the
case of State of Karnataka Vs. M/s Ecom
Gill Coffee Trading Pvt. Ltd. (Civil
Appeal No. 230 of 2023) decided on
13.3.2023 has held that burden was upon
the dealer to prove beyond doubt its claim.
Further, the Apex Court has emphasised in
the said judgement that if the dealer is
claiming any exemption, then burden to
258 INDIAN LAW REPORTS ALLAHABAD SERIES
prove the genuineness of the transaction is
upon the person claiming the benefit. On
that background, the Hon'ble Apex Court
has held that dealer has to prove the actual
physical movement of the goods.

24. Following the said judgement, this
Court in the case of M/s Shiv Trading Vs.
State of UP and others (Writ Tax No.
1421 of 2022) decided on 28.11.2023 has
held that onus to prove and establish
beyond doubt the actual transaction,
physical movement of the goods as well as
genuineness of transaction is required.

25. The said judgement passed in M/s
Shiv Trading (supra) has been confirmed
by the Apex Court in Special Leave to
Appeal (C) No. 3345 of 2024 decided on
12.2.2024.

26. In the case in hand, the petitioner
was duty bound to establish beyond doubt
the actual physical movement of the goods
from West Bengal / Assam to Delhi via
Kanpur but the petitioner has failed to do
so, therefore, accompanying tax invoices
and other documents cannot said to be
genuine. In other words, it is a clear case of
contravention of Act as well as the Rules.

27. It is a glaring example of
organized tax evasion. The petitioner has
failed to bring on record any material to
show actual movement of the goods from
West Bengal / Assam. The details of truck
number or toll receipt crossed during its
journey from West Bengal / Assam to
Kanpur have not been filed at any stage.

28. Various findings have been recorded
against the petitioner as quoted herein above
but the same have not been assailed at any
stage even before this Court. The findings of
fact recorded against the petitioner have
not been assailed and the petitioner chose
in its wisdom to assail only some part of
the finding i.e. on the ground of under
valuation, the seizure cannot be held to be
justified.

29. The record further shows that at the
time of detention, the truck driver made a
statement that the goods were loaded from
Kanpur
whereas
the
accompanying
documents shows that movement of the
goods from West Bengal / Assam thus at the
very first instance, the petitioner ought to
have produce the material showing the
movement of the goods from West Bengal /
Assam. Therefore, the statement of the truck
driver which was taken at the first instance
should be given more sanctity.

30. This Court in the case of M/s Ghata
Mehandipur Balaji Grinding Works Pvt.
Ltd. (supra) has held as under :-

"The Court feels that neither the
papers were available with the revisionist nor
they were produced within a reasonable
period. The statements of the Driver which is
obtained at the first instance should be given
more sanctity than the explanation which are
produced by the managers and proprietors
later-on."

31. The record further shows that orders
have not only been passed on the ground of
under valuation but otherwise.

32. The petitioner even failed to bring
on record any cogent material to show actual
movement of the goods. Once the actual
journey as claimed by the petitioner was not
proved, the proceedings cannot be said to be
illegal or arbitrary.

33. Section 129 of the GST Act refers
that any person transports any goods while
3 All. M/s Jaya Traders Vs. Addl. Commissioner Grade-II & Anr.
259
they are in transit in contravention of the
provisions of this Act or the rules made
thereunder, the said goods shall be liable to
be detained or seized.

34. Under the GST Act, the tax
invoice has to be issued in terms of Section
31 of the Act, which prescribes every
registered dealer supplying the taxable
goods before or at the time of removal of
such supply of goods shall issue a tax
invoice showing the description, quantity
and value of goods, the tax charged
thereon and such other particulars as may
be prescribed.

35. Rule 46 (j) and (k) of GST Rules
also prescribe the particulars to be
mentioned in the tax invoice i.e. total value
of supply of goods and taxable value of
supply of goods.

36. On bare reading of said Sections
as well as the Rules, it clearly shows that
the intent of the legislature is that the
registered dealer shall furnish the true
and correct value of the goods on the
tax invoice. But failing to declare the
true value of the goods would result in
the document being held not be to proper
in
the
context
of
valuation.
The
legislature has conferred the power of
seizure of goods, if the goods in transit
are in contravention of the provisions of
Act as well as the Rules framed
thereunder.

37. Rule 138 empowers for dispensing
the requirement of e-way bill along with
the goods less than Rs. 50,000/-

38. The record clearly shows that
dealer has intentionally undervalued the
goods to take wrong advantage of Rule 138
which dispense the requirement of e-way
bill accompany the goods, cannot be
spared.

39. This Court in the identical set of
facts in the case of M/s Radha Fragrance
Vs. Union of India and others (Writ tax
No. 427 of 2019) has dismissed the petition
vide judgement and order dated 14.2.2023
in which the petitioner had challenged the
seizure of goods on the ground of under
valuation. The relevant paragraphs of the
judgement are quoted hereunder:-

"16. The question, which arises
for consideration is, whether in the garb of
certain protection given under Rule 138
dispensing requirement of E-Way bill for
goods valuing below Rs.50,000/-, a dealer
who is a manufacturer, can be allowed to
send his goods to different consignees
undervaluing the goods and the Tax
Authorities not to proceed taking action
under the Act.

17. ...

18. The Taxing Authorities, on
fair valuation, found that the goods, which
were in transit both Pan Masala and
Tobacco accounted for Rs.7,12,766/- while
the proper disclosure was not made by the
dealer. It was on this undervaluation of
goods that the authorities proceeded and
imposed IGST and penalty.

19.
The
very
purpose
of
downloading E-Way bill is that every
goods, which are in transit, is recorded in
the Web Portal and the Government has a
clear picture of the goods which are
manufactured and sold by the dealers
either Inter-State or Intra-State.

20. It is only to protect small
trade where the value is minimal that the
necessity of downloading E-Way bill is
dispensed with by the Government. The
purpose of dispensing E-Way bill for the
goods below Rs.50,000/- does not allow the
260 INDIAN LAW REPORTS ALLAHABAD SERIES
dealer to undervalue his goods so as to
escape it from bringing to the notice of the
Government and the Taxing Authorities by
uploading the same on the Web-Portal.

21...

22. From the transaction carried
out by the petitioner it is clear that huge
amount of Pan Masala and Tobacco were
being transported undervaluing the goods,
without downloading the mandatory E-Way
bill. In the garb of technicalities, no benefit
can be given to a dealer who has
intentionally undervalued his goods to
escape from the eyes of law.

23 ...,

24.....

25. This Court finds that it is a
case of grossly undervaluing the 3,84,000
pouches of Pan Masala being sent by the
dealer disclosing its price as Rs.69,600/-.
The only conclusion, which can be drawn is
that to avoid downloading E-Way bill and
brining the transaction on record that the
goods were undervalued to such an extent.

26.
Moreover,
the
Taxing
Authorities have also found that one of the
consignee situated at Jharkhand was
actually
registered
with
the
Taxing
Authorities
disclosing
his
nature
of
business as ''Works Contract and Suppliers
of Services' and not in the business of
trading. These actions of the dealer lead to
the only conclusion that the transactions
being not recorded with the Revenue so as
to escape payment of due tax in the garb
that E-Way bill is only required in case
value of goods is more than Rs.50,000/-.

27. Thus, from the above, it can
be safely said that the action of the State
Authorities in detaining the goods and
imposing tax and penalty, which have been
affirmed by the first Appellate Authority,
needs no interference of this Court as the
dealer cannot be permitted to take shelter
of the fact that no E-Way bill is required in
case of goods valued less than Rs.50,000/-.

28.
It
is
clear
case
of
undervaluation of goods by the dealer who
was transporting huge quantity of Pan
Masala and Tobacco showing negligible
value of goods."

40. The record further reveals that
purchasing and selling firm have not shown
any purchase of Pan Masala / Scented
Tobacco in the A.Y. 2021-22. The said fact
has been recorded in GST MOV 07 dated
22.9.2021, which is quoted hereunder:-

"प्रश्नगत सिंव्यवहार में सभी जवक्रेता फमो की
आनलाइन जवभागीय पोटाल पर खरीद जवक्री की िािंच
करने पर पाया गया की वर्ा 2021 -22 में इन फमो द्वारा
पान मसाले एविं तम्बाकू की कोई खरीद प्रदजशात नहीं है।
प्रस्तुत प्रपत्रों की जाांच में यह भी प्रकाश में आया की आसाम
व पदिम बांगाल के पांजीकृत फमो द्वारा दिल्ली के पांजीकृत फमो
को माल के वास्तदवक मूल्य से कम मूल्य घोदषत करते हुवे इस
प्रकार सुदनयोदजत ढांग से इनवॉइस जारी दकये जा रहे है की
प्रत्येक कताा फमो की रू 50 हजार से अदधक मूल्य के माल
की आपूदता भी हो जाये एवां सीजीएसटी रूल 2017 के दनयम
138 के प्रादवधानों का उल्लांघन भी न हो पाए। "

41. Same finding has been recorded in
demand order dated 24.9.2021, which is
quoted hereunder:-

"प्रश्नगत सांव्यवहार में सभी दवक्रेता फमो की
आनलाइन दवभागीय पोटाल पर खरीि दवक्री की जाांच करने पर
पाया गया की वषा 2021 -22 में इन फमो द्वारा पान मसाले
एवां तम्बाकू की कोई खरीि प्रिदशात नहीं है। "

42. A Division Bench of this Court in
the case of M/s Shiv Shakti Trading
Company Vs. State of UP and others
(Writ Tax No. 756 of 2011) decided on
24.5.2011, has an occasion to upheld the
seizure of the goods being made on the
ground of under valuation. The Division
Bench has held that it is incumbent on a
3 All. M/s Jaya Traders Vs. Addl. Commissioner Grade-II & Anr.
261
person, who is transporting goods, to
declare the true value of the goods and
failure to declare the same, would result
non proper document in the context of the
valuation, therefore, the power of seizure of
goods has correctly been exercised against
the petitioner. The relevant paragraphs of
the said judgement are quoted hereunder:

"2. The petitioner, by means of
the present writ petition, has impugned the
seizure order dated 07.05.2011 on the
following grounds:-

"(i) Section 50 of U.P. Value
Added Tax Act does not permit seizure of a
consignment being imported into the State
of U.P. on the ground of undervaluation;
the entire proceedings suffer from an
inherent lack of jurisdiction and are void
ab initio.

.......

4.......As it was alleged in the
notice that the goods were undervalued, the
petitioner demanded, from the respondents,
the basis for alleging the same. The
petitioner denied that the goods were
undervalued and contended that the charge
of undervaluation was unsustainable. The
power to seize goods on the ground of
undervaluation was not available under the
U.P. VAT Act. It was, therefore, contended
that the proceedings are void ab initio. .....

7. ....A perusal, therefore, of the
above provisions would show that, any
person who imports into the State from any
place outside the State any goods, shall
obtain the prescribed form of declaration
in such manner as may be prescribed from
the Assessing Authority having jurisdiction
over the area, where his principal place of
business is situated or, in case there is no
such place, where he ordinarily resides.
Sub-section (4) of Section 50 confers power
in the officer, making the search or
inspection under this Section, who finds
any person transporting or attempting or
abetting to transport any goods to which
this section applies without being covered
by the proper and genuine documents
referred to in the preceding sub-sections
and for the reason to be recorded, if he is
satisfied, after giving such person an
opportunity of being heard, that such goods
were being so transported in an attempt to
evade assessment or payment of tax due or
likely to be due under this Act, he may
order detention of such goods. By virtue of
sub-section (5) of Section 50, various
provisions of Section 48 of the U.P. VAT
Act, which are the machinery provisions,
have been made applicable to the goods
under sub-section (4). One such provisions
is sub-section (7) of Section 48, under
which the officer seizing the goods, can
release the goods on calling upon the
dealer or the person in charge, and
indicating the amount not exceeding the
amount which will be sufficient to cover the
penalty likely to be imposed, to deposit the
said amount in cash. Under the first
proviso
to
this
sub-section,
the
Commissioner or such other officer, not
below the rank of a Deputy Commissioner,
as may be authorised by the Commissioner,
for sufficient reasons to be recorded in
writing, can direct for release of the goods
without any deposit or on depositing such
lesser amount, or furnishing security in
such form other than cash or indemnity
bond, as he may deem fit.

A consideration of this Section
would indicate that the goods have to be
imported by filling in the prescribed
declaration form, and indicating the
quantity or measure and value of the
goods.
This
contemplates
that
the
quantity, measure or value are the real
quantity, measure or value and not short
quantity
or
measure
or
being
undervalued. If this is so read, then sub-
262 INDIAN LAW REPORTS ALLAHABAD SERIES
section (4) of Section 50 can be correctly
understood, as the expression used is
'proper and genuine documents'. A
document, which does not correctly state
the value cannot be said to be a proper
document.

8. .....In our opinion, it would
not be possible for us to follow the
judgment of the learned Judge in Delhi
Calcutta Carrying Corporation (supra)
rendered under the provisions of the U.P.
Trade Tax Act. The reasons being that it is
incumbent on a person, who is importing
goods, to declare the true value of the
goods. Failure to declare the true value of
goods would result in the document being
held not to be a proper document in the
context of the valuation.

9......The legislature itself has
conferred power of detention in respect of
goods being imported under Section 50, if
not covered by proper and genuine
documents and by virtue of Section 50 (5)
has
incorporated
the
machinery
provisions of Section 48 into Section 50.
We, therefore, have no hesitation to hold
that under Section 50 (4) of the U.P. VAT
Act, the officer making search has power
to detain goods not covered by a proper
and/or genuine documents.

We, therefore, have no hesitation
in holding that the power to seize goods
imported into the State without proper or
genuine document is located in Section 50
(4)."
 (Emphasis supplied by this Court)

43. Section 129 (3) read with Section 31
of GST Act as well as Rule 46 of GST Rules is
analogous of Section 48 and 50 of the VAT
Act.

44. If the petitioner wants to take any
advantage of tax invoice accompanying the
goods then primary duty of movement of goods
from West Bengal / Assam to Delhi have not
been discharged.

45. In view of the aforesaid two
judgements one by Division Bench in the case
of Shiv Shakti Trading Company (supra)
and other by the co-ordinate Bench of this
Court in the case of Radha Fragnance
(supra), it has been held 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 Act.

46. Therefore, the judgements relied upon
by the petitioner of Kerala High Court as well
as Chhattisgarh High Court are of no aid to the
petitioner as the jurisdiction High Court has
given the judgement on the issue which
squarely covers the present case.

47. Further the other judgments relied
upon by the petitioner in the cases of S.K.
Trading (supra), M/s Shamhu Saran
Agarwal and company (supra) has not
noticed the earlier judgment given in the case of
M/s Radha Fragrance (supra), hence the
same are per incuriam and of no aid to the
petitioner.

48. However, so far as the Division Bench
judgment relied upon by the petitioner in the
case of M/s Maa Aabe (supra) is concerned, it
is only for the purposes of release of goods and
not in the proceedings under Section 129 (3) of
the Act, therefore, the same is not applicable in
the facts of the present case.

49. In view of above, no interference is
called for by this Court in the impugned
order.

50. All the aforesaid writ petition
lack merit and same are dismissed
accordingly.
3 All. M/s Gurunanak Arecanut Traders Vs. Commissioner, Commercial Tax, Lucknow, U.P. &
 Anr.
263
----------
(2025) 3 ILRA 263
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.03.2025

BEFORE

THE HON'BLE ROHIT RANJAN AGARWAL, J.

Writ Tax No. 1177 of 2022

M/s Gurunanak Arecanut Traders
 ...Petitioner
Versus
Commissioner, Commercial Tax, Lucknow,
U.P. & Anr. ...Respondents

Counsel for the Petitioner:
Ms. Pooja Talwar

Counsel for the Respondents:
C.S.C.

Civil Law - Sate Goods and Service Tax
Act, 2017- Section 68 read with Rule 138
& 138A -E-way bill was generated on the same
day after about three hours after the detention
of the goods- petitioner was not carrying out
the business at the place where the firm was
registered- registration of the firm was also suo
moto cancelled-post amendment in the Rule, it
has become obligatory that goods should be
accompanied with e-way bill -an intention to
evade the tax - description of goods declared
was different-goods declared were taxable @5%
while the goods found on verification were
taxable @18%..

W.P. dismissed. (E-9)

List of Cases cited:

1. M/s. Modern Traders Vs St. of U.P. & ors.,
2018 NTN 187 1287 of 2024

2. Axpress Logistics India Pvt. Ltd. Vs U.O.I. &
ors., 2018 NTN 245

3. Raj Iron and Building Materials Vs U.O.I.,
2018 UPTC 217
4. M/s. Falguni Steels Vs St. of U.P. & ors., 2024
UPTC 221

5. Asharaf Ali K.H. Vs The Assistant St. Tax
Officer & ors., WRIT TAX No. - 1177 of 2022[3]
2021 UPTC 469

6. M/s. Jhansi Enterprises, Nandanpura, Jhansi
Vs St. of U.P. & ors., Writ Tax No. 1081 of 2019,
decided on 01.03.2024

7. M/s. Akhilesh Traders Vs St. of U.P. & ors.,
Writ Tax No. 1109 of 2019, decided on
20.02.2024

(Delivered by Hon'ble Rohit Ranjan
Agarwal, J.)

1. Heard Ms. Pooja Talwar, learned
counsel for the petitioner and Sri Arvind
Kumar Mishra, learned Standing Counsel
for State.

2. Through this writ petition, a
challenge has been made to order dated
16.06.2022 passed by Commercial Tax
Officer, Sector-3 (Mobile Squad), Etah
exercising power under Section 129(1) of
the State Goods and Service Tax Act, 2017
and order dated 24.06.2022 under Section
129(3) and also quashing has been sought
for the demand of tax and penalty of
Rs.90,62,400/- as well as appellate order
dated 18.08.2022.

3. The brief facts of the case are that
petitioner is a registered dealer under State
Goods
and
Service
Tax
Act,
2017
(hereinafter called as "the Act of 2017").
He has sold 400 bags of Arecanut vide tax
invoice dated 09.06.2022 to M/s. Jagdamba
Enterprises, Nagpur which is also said to be
a registered dealer in his respective State.
The said Arecanut was being transported
from Delhi to Nagpur, Maharastra by M/s.
Ravi Goods Transport. The goods were
intercepted at Mathura at 4:28 a.m. on