Seizure order passed is illegal in law, where at the time of transportation of goods neither there was any E-way bill nor any notification by the Central government under Rule 138 of the CGST Rules, for carrying the ‘Transit declaration Form’ during the course of movement of inter-state supply of goods.  

Facts: In this case, the consignment of goods was being transported by the petitioner assessee from the State of Uttarakhand to Kolkata. During the course of movement of these goods, the consignment was intercepted and the goods as well as the documents were checked. Upon verification of the documents presented the competent authority it was found that the ‘Transit declaration Form’ (i.e. TDF) was related to another vehicle and transportation pertaining to different goods. Accordingly, the competent authority has passed the order to seize the goods along with the vehicle. Accordingly, the petitioner filed the present writ petition before the court contending that the provisions under rule 138 of the CGST Rules, 2017 provides no notification issued by the Central Government specifying the documents that a person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage, therefore, the rule was practically inoperative and there was no requirement of carrying any such document on the relevant date, (i.e. date of seizure of the goods and vehicle). The invoice and other documents which were being carried were sufficient for the purpose of transportation, especially as, they revealed that it was an inter-State supply of goods on which IGST had already been paid.

Issue: Whether it is legal to seize the goods and vehicle on the ground that the petitioner was carrying the genuine and original TDF Form. 

Held: The Hon’ble High Court of Allahabad held that at the time of incident i.e. the date on which the consignment was intercepted by the competent authority, there was neither the E-way bill system nor requirement to carry the TDF Form or any other such document in the course of inter-State supply/movement of goods. Therefore, seizure and penalty order imposed by the authority is erroneous and illegal. In view of the above it cannot be said that there was any intent to evade tax.  Thus, the goods cannot be seized and the order of the seizure along with notice of demand of penalty was quashed.

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