Writ Petition (M/S) No. 924 of 2023

Facts of the Case

The petitioner, owner and driver of a vehicle transporting TMT bars for M/s Om International Company, West Delhi, to a consignee in Lakhimpur, Uttar Pradesh, under a sale invoice dated 14.01.2023, was intercepted on 15.01.2023 at the Kashipur-Rudrapur highway in Uttarakhand. No e-way bill accompanied the goods. A show cause notice dated 19.01.2023 proposed a fine of Rs.10,98,000 in lieu of confiscation under Section 130, and by order dated 07.02.2023 the fine equal to the tax payable was confirmed. The Department's investigation revealed the vehicle was on a route inconsistent with its stated Delhi-to-Lakhimpur journey, that the supplier had a history of similar violations and its GST registration was later cancelled, and that the petitioner had told authorities the goods originated from Punjab, contrary to the invoice showing Delhi as the origin.

Issues Involved

  1. Whether mere absence of an e-way bill could justify confiscation proceedings under Section 130, or whether the lesser provisions of Sections 122/164(4) applied.
  2. Whether the cumulative circumstances — mismatched route, false statement on origin, and a supplier with a history of violations — established the requisite "intent to evade payment of tax" under Section 130.

Petitioner's Arguments

  • Senior counsel submitted that carrying an e-way bill is a requirement under Rule 138A of the Rules, and that its absence should attract, at most, a penalty of Rs.10,000 under Section 164(4) or Section 122(1)(xiv), not confiscation under Section 130.
  • Relying on Synergy Fertichem (Gujarat High Court), it was argued that Section 130 requires an established intent to evade tax, that mere failure to carry documents does not, without more, make the vehicle liable to confiscation, and that as a mere transporter the petitioner was not in connivance with the owner of the goods.

Respondent's Arguments

  • The State pointed to multiple discrepancies: the supplier, M/s Om International Company, had a prior interception for a similar violation and its GST registration was cancelled from 10.02.2023; the vehicle was intercepted on a route inconsistent with the invoiced Delhi-to-Lakhimpur journey; the petitioner's own statement recorded the goods as originating from Punjab, contrary to the invoice; and RFID toll-tracking showed the vehicle had not passed expected toll plazas — together evidencing a clear intent to evade tax.

Court Order / Findings

  • The Court accepted that penalty under Sections 164(4) and 122(1)(xiv) does not preclude action under Section 130 where the surrounding facts independently establish intent to evade tax, and that mere absence of an e-way bill alone would not justify confiscation.
  • However, the Court found that the mismatched route, the false statement regarding the goods' origin, the dubious antecedents of the supplier, and the RFID toll data together directly indicated the petitioner's intention to evade tax, distinguishing the case from a bare documentary lapse.
  • Finding the impugned order under Section 130 based on cogent material rather than mere suspicion, the Court declined to interfere and dismissed the writ petition.

Important Clarification

  • Confiscation under Section 130 requires positive evidence of intent to evade tax and cannot rest on a bare documentary lapse such as a missing e-way bill; however, corroborating circumstantial evidence — an inconsistent transport route, a false statement on origin, and links to a supplier with a track record of similar violations — can cumulatively establish such intent.
  • A transporter cannot escape liability under Section 130 merely by asserting ignorance of the consignor's dealings where their own conduct (a false statement, an unexplained route deviation) independently points to complicity.

Sections Involved

  • Section 130, CGST Act, 2017 — confiscation of goods or conveyance and levy of penalty, requiring intent to evade payment of tax.
  • Section 122(1)(xiv), CGST Act, 2017 — penalty for transporting taxable goods without cover of prescribed documents.
  • Rule 138A, CGST Rules, 2017 — requires the person in charge of a conveyance to carry the e-way bill.

Decision – In Favour of

The decision is in favour of the Department, with the writ petition dismissed and the Section 130 confiscation-in-lieu order upheld.

Case Details

Court: High Court of Uttarakhand at Nainital
Case Number: Writ Petition (M/S) No. 924 of 2023
Coram: Hon'ble Mr. Justice Ravindra Maithani
Date of Order: 18.07.2023

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