S.129(3) UPGST | Burden To Prove Double Movement Of Goods Based On Same Documents Lies On Department: Allahabad High Court Reiterates

Relying on its earlier decision in M/s Anandeshwar Traders v. State of U.P. and Others, the Allahabad High Court has held that the burden to prove double movement of goods based on same documents lies on the department.

The Allahabad High Court in M/s Anandeshwar Traders v. State of U.P. and Others held that the positive burden to prove that goods had been transported on an earlier occasion lies on the Assessing Authority. The Court had observed that since no inquiries were made from the assesee, toll plaza, purchasing dealer or any other source as to whether goods had been transported earlier, presumption could not have been drawn by the authorities merely based on the e-way bill.

The Court in M/s Anandeshwar Traders held that conclusion without evidence cannot be drawn against the double use of e-way bill. Such conclusion must be based on facts and evidence found by the assessing authority which has been examined to “test the correctness of the order and not the conclusions, recorded without any material on record.”

Justice Shekhar B. Saraf held that “it is the duty of the authorities to ascertain that whether the double movement of the goods has taken place actually.”

Counsel for petitioner submitted that at the time of interception of goods, all relevant documents were present and matched the description of goods being transported. The goods were detained only based on an alleged statement by the Driver of the vehicle where he stated that he was transporting the goods for the second time using the same documents. It was submitted that this statement of the driver recorded on MOV-01 was never provided to the petitioner.

The Court observed that the counsel for respondent could not produce the MOV-01 as it was not being provided by the officer concerned. Though a sheet was produced before the Court as the statement of the driver, the Court observed that no MOV-01 was accompanying such paper.

Relying on the decision of the Allahabad High Court in M/s Anandeshwar Traders, the Court held that the burden to prove that double movement of goods was on the department which it had not discharged.

Holding that intention to evade tax was not established by the Department, the Court allowed the writ petition.

The Court directed the Commissioner, State Tax, U.P. to consider that the cases were being decided in favor of the assesee based on the inability of the counsel appearing on behalf of the department to effectively argue their case due to lack of support and documents being provided by the authorities.

“A general caution is required to be given to the authorities in respect of the non-assistance and non- providing the relevant documents to the counsel appearing on behalf of respondent authorities resulting in failure of the department's lawyers to defend the case of the department in an effective manner. It is to be noted that this Court on several occasions has passed orders in favour of the assessee as the department has not able to defend its case by timely providing relevant documents to the State counsel.”

Case Title: M/S K Y Tobacco Works Pvt. Ltd. vs. State Of U.P. And 4 Others 2024 LiveLaw (AB) 319 [WRIT TAX No. - 574 of 2019]

Citaiton: 2024 LiveLaw (AB) 319

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