Declaration u/s 138 is Mandatory in case of Delivery Challan: High Court

Declaration u/s 138 is Mandatory in case of Delivery Challan: High Court

The case was raised in front of the High Court of Kerala at Ernakulam. The court says, that the Declaration u/s 138 is Mandatory in case of Delivery Challan.

M/S.INDUS TOWERS LIMITED
Versus.
THE ASSISTANT STATE TAX OFFICER & 
STATE TAX OFFICER (INTELLIGENCE)

Judgment

Whether in the case of a transport, wherein obviously there is no tax liability on the goods, there could be a detention and seizure effected under Section 129 of the Central Goods and Services Tax Act, 2017 [for brevity “CGST Act”] and Kerala State Goods and Services Tax Act, 2017 [for brevity “SGST Act”] and a release ordered as provided under sub-section (1) or order passed under sub-section (3) of Section 129, is the question raised in the appeal. We need to first briefly look at the facts of both these
appeals filed by the State.

2. The writ petitioner in W.A.No.371/2018 is engaged in the establishment of infrastructure for cellular telephone Companies, meaning the erection and activation of towers and other infrastructure for effective services of the mobile companies. The petitioner for the purpose of such installation had imported from other States, batteries, which were stored in its go-downs at Ernakulam. These were to be installed in two sites at Gandhinagar at Kadavanthara and at Ambalappuzha. The vehicle in which the transport was made was detained. On examination of the documents, it was found that the goods were accompanied with a delivery challan as provided under Rule 55 of the Kerala Goods and Services Tax Rules, 2017.

However, the declaration as required under Rule 138 being KER-I, was not seen uploaded or the print out accompanied with the goods. The detaining officer issued a notice at Ext.P3 detaining the goods against which the writ petitioner was before this Court. In the other appeal the writ petitioner, dealer in surgical gloves, sent the goods for the quality appraisal on job-works and was transporting the same to their business premises for further sale; when the vehicle was detained.

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3. The learned Single Judge looked into the provisions defining taxable person and taxable supply as also Section 7 detailing the scope of supply to find that when a taxable person transports goods procured by them for own use to the site, where the goods are to be consumed, the transaction is not for consideration and would not even fall within the scope of Schedule I. Schedule I enumerates those activities, though made without consideration, which fall within the scope of supply. The delivery challan which accompanied the goods had not been disputed and hence the transaction even according to the detaining officer would not fall within the scope of a taxable supply, was the finding. In such circumstances, the goods can be said to have been detained only for the infraction, insofar as a declaration under Rule 138 (KER-I) having not been uploaded and accompanied with the transport.