Heard learned counsel for the parties for final disposal of the petition.

Petitioner is a transporter. On 13th May 2021, four Ashok Leyland trucks were being brought within the State. These trucks were intercepted by the General Sales Tax (GST) authorities on the ground that the drivers did not possess valid e-way bills for these heavy vehicles. A notice was, therefore, issued to the transporter by the Superintendent of State Taxes, Churaibari Enforcement wing on 15th May 2021 in which it was asserted that the goods were being brought within the State by contravening the provisions of Tripura State General Sales Tax Act, 2017 and there was an attempt to evade tax. The noticee was, therefore, called upon to show cause why the unpaid tax with penalty under State as well as Central GST Acts should not be recovered.

The petitioner replied to the said show cause notice, on 19th May 2021, pointing out that upon arrival the driver had produced the tax invoice, gate passes and e-way bills of the said vehicles. The e-way bills were valid for the period between 3rd May 2021 to 21st May 2021 and that the petitioner having paid full taxes there was no breach or violation of any of the provisions.

On 20th May 2021, Superintendent of State Taxes conveyed to the petitioner that the vehicles which were being brought within the State were new motor vehicles with temporary registration numbers which were affixed in the front of the vehicles and the e-way bills in connection of these vehicles did not display the temporary registration numbers supported by trade certificate issued from the Transport Department of the concerned State. Thus the petitioner had contravened the provisions of Rule 138 of State General Sales Tax Rules, 2017 and therefore, Section 129 of the GST Act was invoked.

On 21st May 2021, the Superintendent of Taxes wrote yet another letter to the petitioner pointing out that the vehicles were detained since the drivers did not carry e-way bills and, therefore, the request for release of the vehicles cannot be considered. These vehicles will be released after completion of all procedures specified in Section 129 of Tripura State GST Act and the Rules made thereunder.

On 29th May 2021, the Superintendent of Taxes issued a demand notice to the respondent No.4 the consignee of the vehicles. In 4 separate demand orders, he had raised the demand for payment of tax with penalty a total of which comes to approximately ₹ 31,00,000/-. In this background, the transporter has filed this petition and prayed for quashing the show cause notice dated 15th May 2021 and communication dated 21st May 2021.

Learned counsel for the petitioner submitted that the drivers were carrying all necessary documents along with the vehicles. The GST was fully paid earlier and there was no evasion of the duty in any manner.

Only minor technical defect, if at all, was that the e-way bills did not contain the temporary registration of the vehicles in question. This defect was also later on removed by generation of fresh e-way bills in the system and producing before the authorities despite which the vehicles continued to be detained. He submitted that the Superintendent of Taxes has raised a demand on the consignee of the goods without passing the order of assessment which is wholly impermissible.  

Learned Additional Government Advocate Mr. Karnajit De for the State submitted that the Superintendent of Taxes was perfectly justified in intercepting the vehicles and raising the tax demand since the drivers did not carry necessary documents at the time of interception of the vehicles. Subsequent generation of e-way bills would not cure the defect.

Learned counsel Mr. Tanmay Debbarma for the respondent No.4 submitted that the said respondent is the consignee of the goods and has nothing to do with the transportation thereof. If there is any defect or nonpayment of tax, the respondent No.4 is not liable in any manner.

Whether the defects in the e-way bills were merely technical or substantial inviting fresh collection of tax with or without penalty is a question neither necessary nor possible for us to examine at this stage in this petition. What is of considerable relevance, however, is that the Superintendent of Taxes has adopted a procedure which is wholly irregular. In the show cause notice dated 15th May 2021, he had not elaborated the ground that the e-way bills did not carry the reference to the temporary registration numbers duly certified by the State RTO authorities, a ground which he raised in subsequent communication dated 20th May 2021. The petitioner, therefore, did not have opportunity to meet with these grounds. Further, he has raised a demand for unpaid tax with penalty and sought to recover the same from the consignee. This is wholly irregular. Demand notice must be preceded by an order of assessment, an order which can also be challenged by the person aggrieved before the appellate authority.

In the present case, the Superintendent of Taxes has not passed any order of assessment before raising recovery of the amounts. In any case, he had issued a show cause notice for assessment to the petitioner and the demand notices raised to respondent No.4. Ordinarily, we would have rested at quashing the demand notice(though not specifically challenged by the petitioner since it was never served to the petitioner).

However, in the present case as noted, the initial show cause notice which the Superintendent of Taxes issued to the petitioner did not contain the grounds which were mentioned in the later communication dated 21st May 2021. The reply that the petitioner therefore filed to the show cause notice, on 19th May 2021, did not cover the grounds and allegations made in the communication dated 20th May 2021.

Under the circumstances, we would though permit the Superintendent of Taxes to carry out proper assessment and pass an order of assessment, the petitioner must be given an additional opportunity to file reply. While this process may go on, the vehicles cannot be detained at the check post for indefinite period. Firstly, according to the petitioner, all taxes were already paid and the defect pointed out by the Superintendent of Taxes was technical and in any case, later on cured. Secondly, the vehicles have been detained since 13th May 2021, are unattended and lying in uncovered condition. The condition of these vehicles would certainly deteriorate in this ongoing monsoon. On certain conditions, pending further proceedings these vehicles must be released.

The petition is, therefore, disposed of with following directions:

(i) Demand notice dated 29th May 2021 is set aside.

(ii) For the purpose of carrying out assessment, the show cause notice, dated 15th May 2021 read with the communication dated 20th May 2021, from the Superintendent of Taxes to the petitioner shall be treated as a show cause notice.

(iii) The petitioner shall have time up to 20th August, 2021 to file further reply, if so desired.

(iv) The Superintendent of Taxes shall consider the reply and give a hearing to the petitioner’s representative, if so demanded and thereafter pass an order of assessment in terms of the provisions of GST Act.

(v) The vehicles in question shall be released upon petitioner furnishing unconditional Bank guarantee to the tune of 25% of the total amount and furnishing a bond for remaining amount of 75% indicated in the demand notices dated 29th May 2021.  

Pending application(s), if any, also stands disposed of.