Bihar Milk Products Pvt. Ltd v. Additional Cimmissioner Grade

1. Heard Sri Suyash Agarwal, learned counsel for the petitioner and learned ACSC.

2. By means of the present writ petition the petitioner has prayed for quashing the order dated 4.3.2023 passed by the Additional Commissioner Grade 2 (Appeal), respondent no.1 as well as the order dated 12.10.2021 passed by the Deputy Commissioner, State Tax, Bulandshahr, respondent no.2.

3. Learned counsel for the petitioner submits that the petitioner is a registered company carrying on business of purchase and sale of Deshi Ghee, S.M.P., Butter & Milk product etc. He further submits that during the financial year 2018-19 the petitioner made purchases of Deshi Ghee from different suppliers of Haryana and Rajasthan against which the tax invoices, e-way bills, Bilties etc. were generated and payments were made to the sellers/ suppliers through the banking channel as well as duly recorded in the stock register of the petitioner after receipt. He further submits that proceedings under section 74 of the CGST Act were initiated as the petitioner has purchased the goods from Haryana and Rajasthan and when the trucks used have not crossed Toll plaza the petitioner has not shown any payment of transportation to M/s Sarwast Golden Transport Company.

4. He further submits that proceedings were initiated on the premise that the trucks used in transporting the goods have not crossed the toll plaza, therefore, the movement was doubted. He further submits that for transportation of the goods from Haryana 24 trucks and from Rajasthan 10 trucks were used and as no payment of freight was paid to M/s Sarwast Golden Transport Company, as same was covered as 'FOR' but still proceedings were initiated and order under section 74 of the Act was passed on 12.10.2021 against which an appeal was filed which was partly allowed.

5. He further submits that while allowing the appeal partly, finding of fact has been recorded that merely on the alleged ground that trucks have not crossed the toll plaza proceedings under section 74 of the Act cannot be initiated. He further submits that 2 WTAX No. 749 of 2023 out of 24 trucks (carrying goods from Haryana) 8 truck numbers could not be verified from the website of Haryana. Similarly out of 10 trucks (carrying goods from Rajasthan) 2 truck numbers could not be verified, as such the benefit the said benefit was not accorded to the petitioner. He further submits that so far as non payment of freight for 6 bilties to M/s Sarwast Golden Transport Company is concerned, specific stand was taken that the same was on 'FOR' destination and sellers have borne the cost of freight which has neither been disbelieved nor any specific finding was recorded in the assessment order.

6. He further submits that only a statement has been made in the impugned order that reply is not acceptable which levied the tax. He further submits that the petitioner was never put to notice with regard to the finding that the truck numbers of 8 trucks which were used for bringing the goods from Haryana and 2 trucks used for brining the goods from Rajasthan, are not verifiable and the said grounds have been taken without any notice or opportunity to the petitioner, which is not permissible. Further for 'FOR' purchase no weightage has been given to the same. He further submits that with regard to above submissions, specific pleadings have been made in paragraph nos. 24, 25, 27 and 28 of the writ petition, which have not been rebutted specifically in the counter affidavit by the State. He prays that on the facts and circumstances of the case, the matter requires re-consideration.

7. Per contra, learned ACSC supports the impugned order and submits that proceedings under section 74 of the Act have rightly been initiated against the petitioner as the movement of goods has been doubted. He further submits that once the actual movement of goods has been doubted the proceedings cannot be said to be arbitrary.

8. After hearing the learned counsel for the parties, the Court has perused the record.

9. Record shows that the appeal has been partly allowed. No material has been brought on record with regard to the basis of initiation of proceedings that the trucks have not crossed the toll plaza. Against the said finding of fact in favour of the petitioner, the Revenue has not come up before this Court or challenged the said finding of fact, nor has it been sown that any adverse inference has been drawn against the petitioner. For the first time, at this stage it has been revealed that the trucks used for transportation of goods from Haryana and Rajasthan, are not verifiable at the transport portal. Neither any notice was given to the petitioner nor any opportunity was given to rebut the said finding. Further the petitioner has brought material on record to show that 6 bilties for which no payment for transportation has been made as goods were purchased on 'FOR' basis, but without assigning any reason the appellate court has rejected the same. In view of the above, this Court feels that it is a matter for reconsideration.

10. Accordingly, the order dated 4.3.2023 passed by the Additional Commissioner 3 WTAX No. 749 of 2023 Grade 2 (Appeal), respondent no.1 is modified to the extent that the first appellate authority shall re-consider the issue that with regard to the findings that 8 truck used for transportation of goods from Haryana and 2 truck used for the same from Rajasthan were not varified from the transport portal and 6 bilties to which no freight has been paid, within a period of three months from the date of production of a certified copy of the order.

11. Parties are at liberty to adduce their evidence in support of their claim.

12. The writ petition is allowed to the extent as above. September 9, 2025 (Piyush Agrawal,J.) SYED AKHTARMOHAMMAD MEQDAD High Court of Judicature at Allahabad

1. Heard Sri Suyash Agarwal, learned counsel for the petitioner and learned ACSC.

2. By means of the present writ petition the petitioner has prayed for quashing the order dated 4.3.2023 passed by the Additional Commissioner Grade 2 (Appeal), respondent no.1 as well as the order dated 12.10.2021 passed by the Deputy Commissioner, State Tax, Bulandshahr, respondent no.2.

3. Learned counsel for the petitioner submits that the petitioner is a registered company carrying on business of purchase and sale of Deshi Ghee, S.M.P., Butter & Milk product etc. He further submits that during the financial year 2018-19 the petitioner made purchases of Deshi Ghee from different suppliers of Haryana and Rajasthan against which the tax invoices, e-way bills, Bilties etc. were generated and payments were made to the sellers/ suppliers through the banking channel as well as duly recorded in the stock register of the petitioner after receipt. He further submits that proceedings under section 74 of the CGST Act were initiated as the petitioner has purchased the goods from Haryana and Rajasthan and when the trucks used have not crossed Toll plaza the petitioner has not shown any payment of transportation to M/s Sarwast Golden Transport Company.

4. He further submits that proceedings were initiated on the premise that the trucks used in transporting the goods have not crossed the toll plaza, therefore, the movement was doubted. He further submits that for transportation of the goods from Haryana 24 trucks and from Rajasthan 10 trucks were used and as no payment of freight was paid to M/s Sarwast Golden Transport Company, as same was covered as 'FOR' but still proceedings were initiated and order under section 74 of the Act was passed on 12.10.2021 against which an appeal was filed which was partly allowed.

5. He further submits that while allowing the appeal partly, finding of fact has been recorded that merely on the alleged ground that trucks have not crossed the toll plaza proceedings under section 74 of the Act cannot be initiated. He further submits that 2 WTAX No. 749 of 2023 out of 24 trucks (carrying goods from Haryana) 8 truck numbers could not be verified from the website of Haryana. Similarly out of 10 trucks (carrying goods from Rajasthan) 2 truck numbers could not be verified, as such the benefit the said benefit was not accorded to the petitioner. He further submits that so far as non payment of freight for 6 bilties to M/s Sarwast Golden Transport Company is concerned, specific stand was taken that the same was on 'FOR' destination and sellers have borne the cost of freight which has neither been disbelieved nor any specific finding was recorded in the assessment order.

6. He further submits that only a statement has been made in the impugned order that reply is not acceptable which levied the tax. He further submits that the petitioner was never put to notice with regard to the finding that the truck numbers of 8 trucks which were used for bringing the goods from Haryana and 2 trucks used for brining the goods from Rajasthan, are not verifiable and the said grounds have been taken without any notice or opportunity to the petitioner, which is not permissible. Further for 'FOR' purchase no weightage has been given to the same. He further submits that with regard to above submissions, specific pleadings have been made in paragraph nos. 24, 25, 27 and 28 of the writ petition, which have not been rebutted specifically in the counter affidavit by the State. He prays that on the facts and circumstances of the case, the matter requires re-consideration.

7. Per contra, learned ACSC supports the impugned order and submits that proceedings under section 74 of the Act have rightly been initiated against the petitioner as the movement of goods has been doubted. He further submits that once the actual movement of goods has been doubted the proceedings cannot be said to be arbitrary.

8. After hearing the learned counsel for the parties, the Court has perused the record.

9. Record shows that the appeal has been partly allowed. No material has been brought on record with regard to the basis of initiation of proceedings that the trucks have not crossed the toll plaza. Against the said finding of fact in favour of the petitioner, the Revenue has not come up before this Court or challenged the said finding of fact, nor has it been sown that any adverse inference has been drawn against the petitioner. For the first time, at this stage it has been revealed that the trucks used for transportation of goods from Haryana and Rajasthan, are not verifiable at the transport portal. Neither any notice was given to the petitioner nor any opportunity was given to rebut the said finding. Further the petitioner has brought material on record to show that 6 bilties for which no payment for transportation has been made as goods were purchased on 'FOR' basis, but without assigning any reason the appellate court has rejected the same. In view of the above, this Court feels that it is a matter for reconsideration.

10. Accordingly, the order dated 4.3.2023 passed by the Additional Commissioner 3 WTAX No. 749 of 2023 Grade 2 (Appeal), respondent no.1 is modified to the extent that the first appellate authority shall re-consider the issue that with regard to the findings that 8 truck used for transportation of goods from Haryana and 2 truck used for the same from Rajasthan were not varified from the transport portal and 6 bilties to which no freight has been paid, within a period of three months from the date of production of a certified copy of the order.

11. Parties are at liberty to adduce their evidence in support of their claim.

12. The writ petition is allowed to the extent as above. September 9, 2025 (Piyush Agrawal,J.) SYED AKHTARMOHAMMAD MEQDAD High Court of Judicature at Allahabad