Revenue Cannot Beat Around The Bush, Keep Changing Goal Post At Each Stage: Allahabad High Court Quashes Detention Order

The Allahabad High Court has held that stand taken by revenue in the detention order cannot be changed in the subsequent show cause notice in proceedings arising out of same detention of goods.

While quashing the detention order and consequential proceedings, the bench comprising of Justice Siddhartha Varma and Justice Shekhar B. Saraf held

“It is trite law, settled by a catena of Supreme Court judgments, that the Revenue cannot beat around the bush and keep changing the goal post at each stage. Once the Revenue had taken a particular stand, the same cannot be completely changed and/or supplemented by a different reason or ground.”

Petitioner's good were in transit from Patna to Aligarh when they were detained. The only ground mentioned in the detention order was that the goods were not accompanied with valid documentation.

However, the Court observed that show cause notice issued to petitioner did not contain any such reasons as mentioned in the show cause notice. The show cause notice was issued on grounds that the registration of the four suppliers of petitioner was either suspended or cancelled. The Court observed that there was complete silence regarding reasons mentioned in the detention order.

Relying on the decision of the Gujarat High Court in F.S. Enterprise vs. State of Gujarat, and the decision of Allahabad High Court in on M/s. Gobind Tobacco Manufacturing Co. & Anr. vs. State of U.P. & Ors., counsel for petitioner argued that detention of goods is illegal if goods seized are backed by even photocopies of the valid documents.

Further, reliance was placed on the decision of the Supreme Court in Mohinder Singh Gill & Anr. vs. The Chief Election Commissioner, New Delhi & Ors. wherein it was held that order passed by an authority can be justified by the reasons mentioned therein. Reasons for passing an order cannot be supplemented by an affidavit or otherwise.

Defending the detention order and subsequent show cause notice, counsel for respondent argued that procedure in laid down in the GST Act and must be followed. Relying on the decision of the Supreme Court in State of Uttar Pradesh vs. M/s. Kay Pan Fragrance Pvt. Ltd., it was argued that under the GST Act, valid documents are required to carried with goods in transit.

The Court observed that in the show cause notice there was “no whisper” of the reason that the goods were not accompanied by valid documents.

“However, when the show-cause notice was issued, there is no whisper of any invalid document whatsoever. In fact, the stand was completely changed by the Revenue and this volte face cannot be countenanced by this Court,” observed the Court.

The Court held that the detention of goods has cause serious prejudice to the assessee. The Court held that the detention was illegal and the consequent show cause notice was vitiated.

Accordingly, the detention order and the consequent show cause notice were quashed. Though the Court was inclined to impose cost, the same was not done at the behest of the counsel for respondent.

Case Title: Jitendra Kumar vs. State of U.P. and Another 2023 LiveLaw (AB) 509 [WRIT TAX No. - 1425 of 2023]

Citation: 2023 LiveLaw (AB) 509

Counsel for Petitioner: Aditya Pandey

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