2025(03)LCX0088

SL Yadav Cranes Private Limited

Versus

State of U.P.

WRIT TAX No. - 607 of 2025 decided on 07-03-2025

Neutral Citation No. - 2025:AHC:34268-DB

Chief Justice's Court

Case :- WRIT TAX No. - 607 of 2025

Petitioner :- SL Yadav Cranes Pvt. Ltd.
Respondent :- State of U.P. and another
Counsel for Petitioner :- Ajay Kumar Yadav,Siddharth Yadav
Counsel for Respondent :- Ankur Agarwal, S.C.

Hon'ble Arun Bhansali,Chief Justice
Hon'ble Kshitij Shailendra,J.

1. This petition has been filed by the petitioner aggrieved of the order dated 22.01.2025 passed under Section 129(3) of the Central Goods and Services Tax Act, 2017 ('the Act') passed by the Assistant Commissioner, Mobile Squad - I, State Tax, Ghaziabad/respondent no. 2 creating a demand of Rs.59,00,000/-.

2. Submission has been made that petitioner's company is engaged in providing machineries on rent and is registered under the provisions of the Act. The company was hired for a short period of one day by L & T Limited to mobilize/rent certain goods at its project site Ghaziabad. On 14.01.2025 at about 1.30 a.m. the goods were transported through vehicle No. HR-58C-4623. The delivery challan no.13 and e-way bill were accompanying the vehicle. After completion of the assigned work, when the vehicle of the petitioner was returning from the project site at Ghaziabad to Delhi, petitioner generated e-way bill and delivery challan. The vehicle was intercepted by respondent no. 2 on 15.01.2025 at around 00.47 a.m. The documents accompanying the goods were produced by the driver, his statement was recorded. However, it was wrongly indicated in GST MOV-01 that no documents were produced, the same indication was made in GST MOV-02. Whereafter, MOV-04 was issued wherein after physical verification no discrepancy in the goods was noticed. However, in the order of detention passed under Section 129(1) of the Act, it was indicated that goods were not covered by valid documents.

3. It is submitted that due to inadvertent typographical error, the vehicle number in the e-way bill was indicated as HR-46C-4623 instead of HR-58C-4623 and on account of the said minor mistake, a demand was sought to be raised. 4. In response to the show cause notice, the petitioner filed reply indicating typographical error in indicating the number of the vehicle and indicated its status as owner of the goods alongwith documentary proof. However, the proceedings were concluded against the driver without considering the reply and penalty under Section 129(3) of the Act to the tune of Rs.59,00,000/- was imposed.

5. Submission has been made that on account of minor typographical mistake, the demand could not havebeen raised.

6. Further submission has been made that imposing the penalty under Section 129(1)(b) of the Act is wholly unjust despite the fact that petitioner had claimed ownership of the goods along with documentary proof and therefore, the order impugned deserves to be quashed and set aside.

7. Learned Standing Counsel supported the order impugned indicating that admittedly the goods accompanying the vehicle were not covered by a valid document as there was discrepancy in the vehicle number purportedly on account of typographical mistake and therefore, initiation of action under Section 129 of the Act cannot be faulted.

8. We have considered the submissions made by counsel for the parties and perused the material available on record.

9. The facts are not in dispute that documents were accompanying the goods and at the time of interception of the vehicle, requisites with discrepancy about vehicle number only were found and ownership of the goods was specifically claimed by the petitioner. However, the penalty has been imposed under Section 129(1)(b) of the Act.

10. In M/s. Halder Enterprises v. State of U.P. & others (Writ - Tax No. 1297 of 2023) decided on 11.12.2023, a co-ordinate Bench of this Court, based on the circular dated 31.12.2018 came to the conclusion that wherever the said circular is applicable and when the tax invoice and the E-way bill are produced by the assessee, the goods shall be treated as belonging to the assessee, who comes before the authorities as the owner of the goods and produces the documents and it was further held that in such cases that the security is required to be in terms of Section 129(1)(a) and not under Section 129(1)(b) of the Act and therefore, the goods are required to be released under Section 129(1)(a) of the Act.

11. In the present case, the principle laid down in the case of M/s. Halder Enterprises (supra) would apply and the goods have to be released under Section 129(1)(a) of the Act.

12. In the light of the above, the order impugned dated 22.01.2025 passed by respondent no. 2 is quashed and set aside. The authorities are directed to carry out the exercise in terms of Section 129(1)(a) of the Act with expedition.

13. The petitioner would be free to pursue its remedy in accordance with law before the appropriate forum qua the other issues.

14. With the above directions, the petition stands disposed of.

Order Date :- 7.3.2025

(Kshitij Shailendra, J) (Arun Bhansali, CJ)