Notification

No benefit can be given to dealer who intentionally undervalued his goods to escape from eyes of law: HC

    Radha Fragrance x Union of India [2023] 148 taxmann.com 431 

The petitioner received orders for supply of Pan Masala and Chewing Tobacco. The goods in transit from State of Haryana to Jharkhand were intercepted by mobile squad and it was found that the vehicle was transporting 120 Cartoons of Pan Masala and tobacco in place of 60 Cartoons which was evident from tax invoices produced by the driver.

The department passed the order under section 129(3) of the Central GST Act, 2017 and levied penalty. The petitioner filed appeal which was rejected and he filed writ petition against the order. It was contended that he had recently started his business and to compete in the Pan Masala segment, he was offering huge discount and the price disclosed in the Tax Invoices can't be disbelieved looking to the competitiveness in the business.

The Hon'ble High Court noted that the purpose of dispensing E-Way Bill for the goods below 50,000 does not allow the 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.

In the instant case, the huge amount of Pan Masala and Tobacco were transported by grossly undervaluing goods and without downloading mandatory E-Way Bill. Therefore, no benefit can be given to dealer who intentionally undervalued his goods to escape from eyes of law. Thus, the Court held that the action of State Authorities in detaining goods and imposing tax and penalty would need no interference.

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Thanks

CA Rahul Gupta

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