Description Of New Aluminium Section As Aluminium Scrap, Detention Order Upheld: Rajasthan High Court

In the case of M/s. Shrimali Industries Pvt. Ltd. vs State Of Rajasthan(D.B. Civil Writ Petition No. 8892/2018), The division bench of Justice Sandeep Mehta and Justice Kuldeep Mathur has observed that the department was justified in detaining the petitioner’s vehicle and the goods after noticing the blatant mis-description during interception.


The petitioner assailed the order by which the vehicle of the petitioner was detained by the officials of the Assistant Commissioner of State Tax, Anti-Evasion, Udaipur and also the show cause notice. The petitioner submitted that the vehicle/goods of the petitioner were illegally detained by the respondent/department while in transit. Aluminium scrap was being transported in the vehicle, and it was falsely shown to be aluminium in the inspection/detention memo. The petitioner contended that the action of the department was in gross contravention of the procedure provided under Section 68 read with Section 129 of the CGST Act. The department also violated the guidelines and procedures for interception of conveyances for inspection of goods in movement and for detention, release, and confiscation of goods and conveyances issued by the Government of India. The department contended that it was found that the documents, which were being carried in the vehicle, were with a patently fraudulent declaration that the goods under transit were aluminium scrap, whereas actually brand new aluminium sections wrapped in protective plastic packaging material were being transported. The rate of the scrap as denoted in the E-Way Bill was a mere Rs. 6,42,600, whereas the rate of new aluminium sections weighing 6300 Kgs. would be Rs. 11,02,500.


The court noted that, by portraying the goods in transit to be aluminium scrap in the documents, the petitioner was indulging in blatant evasion of GST. The court held that an inspecting authority can detain the goods if there is a patent mis-description in the transportation documents to such an extent that it can only be seen as referring to an entirely different commodity.



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