HON’BLE ROHIT RANJAN AGARWAL, J.

Heard Sri Pranjal Shukla, learned counsel for the petitioners and Sri Rishi Kumar, learned Standing Counsel for the State.

This writ petition has been filed challenging the show-cause notice dated 29.04.2022 issued by respondent no. 4 and order dated 14.05.2022 imposing penalty under Section 129(1)(b) of the IGST Act, 2017 by respondent no. 4 and the appellate order dated 30.06.2022 passed by respondent no. 3.

Facts in brief, are that petitioner no. 1 is the driver of the seller, while petitioner no. 2 is a private limited company incorporated under the provisions of the Indian Companies Act having its registered office and principal place of business at Gautam Buddh Nagar and unit at Muzaffar Nagar. Petitioner no. 2 is engaged in the business of smelting and manufacture of lead from scrap and old non-guaranteed batteries.

On 25.04.2022, petitioner no. 2 placed an order for purchase of scrap batteries of around 15,150 kgs. to M/s. Sunshine Overseas, New Delhi. The goods were dispatched by the seller firm, M/s. Sunshine Overseas, New Delhi through Haridwar Roadways, Vehicle No. UP 12 BT 7179, along with an e-way bill and other accompanying documents. On 26.04.2022, goods were intercepted by the mobile squad. On 29.04.2022, detention order was passed in form GST-MOV-06 and notices were issued to the seller firm as well as the buyer. An inquiry was conducted by the taxing authorities about the details of the seller, and it was found that firm was bogus and its registration was suspended on 04.05.2022. On 14.05.2022, a penalty order was passed by respondent no. 4 imposing penalty of Rs.18,77,085/-. Against the said order, an appeal was preferred before the Additional Commissioner, Grade-II (Appeal), First Commercial Tax, Meerut. The said appeal has been dismissed on 30.06.2022. Hence, the present writ petition.

Learned counsel for the petitioner submitted that goods which were intercepted by the mobile squad were carrying the e-way bill generated by the seller along with all the documents as required, and the authorities were not correct to pass the detention order as well as imposing penalty. He further contended that appellate authority should not go into the question whether the seller is a bona fide dealer or not, as at the time of registration it was registered under the provisions of the Act and the e-way bill was generated. He further contended that once the goods in transit were carrying all the documents as required under Rule 138, the proceeding initiated by the respondents authorities was not justified.

Per contra, Sri Rishi Kumar, learned counsel appearing for the State submitted that the documents accompanying the goods declared that the sale was made to petitioner no. 2. On the vehicle being intercepted and statement of petitioner no. 1/driver having been recorded it was found that the goods were loaded from Mayapuri, Delhi which is 18 kms. away from the principal place of business of selling dealer which is Rajeev Nagar, Delhi. The loading of goods was made from undeclared place. According to him, the e-way bill declared goods to be loaded from Rajeev Nagar, Delhi. A physical inspection conducted at the business place of the selling dealer, M/s. Sunshine Overseas, it was found that the firm was not existing and its registration was suspended by the adjudicating authorities. According to him, notices were issued by respondent no. 4 to both the selling dealer as well as the purchasing dealer in MOV-7/DRC-01 on 29.04.2022 but no reply was submitted within 7 days. The purchasing dealer sought five days’ extra time but that too expired on 11.05.2022 and no reply was submitted, thus, respondent no. 4 proceeded to pass the order imposing penalty. According to learned counsel, goods which were sent were a part of bogus transaction and were being made in order to pass on admissible ITC.

I have heard learned counsel for the parties and perused the material on record.

The sole question engaging the attention of the Court is as to whether, the orders under challenge need any interference of this Court once specific finding has been recorded by both the parties to the extent that the selling dealer was non existent at the place where his firm is said to have been registered and only through the e-way bill generated, goods were being sent from some other undisclosed place and ITC was to be claimed. Both the authorities have recorded a categorical finding to the effect that selling dealer, M/s. Sunshine Overseas was registered at Shri Ram Colony, Siya Wali Masjid, Rajeev Nagar, North East Delhi, Delhi. The e-way bill mentioned the goods to have been dispatched from the said place. The statement of the driver recorded disclosed that goods were loaded from Mayapuri, Delhi, which is 18 kms. away from Rajeev Nagar. On physical verification of the premises of M/s. Sunshine Overseas, it is clear that no business transaction was being done from that place and the GST registration was suspended on 04.05.2022. The selling dealer till date has not responded to the notice of the taxing authorities nor has come forward to state that goods were sent by him through the e-way bill alleged to have been generated from the portal from the address mentioned therein. The taxing authorities had also scrutinized the records of the selling dealer for the assessment year 2021-22 and found that it was not indulging in any sale and purchase and bogus transactions were only made for claiming ITC. The Assistant Commissioner/ respondent no. 4 had recorded categorical finding that no reply has been given disclosing the banking transaction made between the parties. Once, it is found that selling dealer was bogus firm, the goods carrying the e-way bill generated by such firm is of no benefit to the petitioners as the same has been used for transiting the goods from non bona fide dealer from undisclosed place.

Considering the facts and circumstances of the case, I find that no interference is required in the orders passed by respondent nos. 3 and 4.

Writ petition fails and is hereby dismissed.