Allahabad High Court Rules if Invoice or Related Document Accompanies Goods, Consigner or Consignee is Termed Owner

Allahabad High Court Rules if Invoice or Related Document Accompanies Goods, Consigner or Consignee is Termed Owner

The matter arose due to the breakdown of the vehicle transporting the consignment from one state to another

The Allahabad High Court has held that if goods are accompanied by invoices or any other specified document, the consignee or the consigner shall be deemed the owner of the goods.

The bench comprising Justice Ashwani Kumar Mishra and Justice Syed Aftab Husain Rizvi further stated that in such a scenario, the penalty, if any, should be imposed under Section 129(1)(a) of the Goods and Services Tax (GST) Act, 2017.

The petitioner was transporting a consignment for Tata Steel Ltd. from Odisha to Pilkhua in Uttar Pradesh.

Due to the breakdown of the engine in the State of Jharkhand, there was a delay in transporting the goods. As a result, the e-way bills expired. However, the petitioner managed to extend one of the bills, but the GST portal did not allow any extension to the other bills. Thus, the goods were detained in Kanpur, Uttar Pradesh.

The counsel for the petitioner contended that the penalty, if any, could not be imposed under Section 129(1)(b) of the GST Act since the owner of the goods appeared before the authorities.

Relying on Circular No. 76/50/2018-GST dated 31.12.2018 issued by the Central Board of Indirect Taxes and Customs, the counsel argued that the penalty could only be imposed under Section 129(1)(a). Since the invoice and e-way bills accompanied the goods, the consigner/consignee should be considered as owner of the goods.

While the State objected to the remedy of appeal under Section 107, it did not dispute that the requisite documents accompanied the goods.

Thus the judges allowed the writ petition stating, “In view of the fact that the department does not dispute the petitioner's assertion that the goods in transit were carrying necessary documents in the form of e-way bill and invoice etc., the department ought to have considered the petitioner's prayer for release of goods and vehicle upon compliance of the provisions contained under Section 129 (1) (a) of the GST Act.”