The Allahabad High Court held that the the detention of goods causes serious prejudice to an assessee and the same can only be done on the basis of specific, valid and reasonable grounds.

The Court also observed that Revenue Department cannot alter its grounds for detention arbitrarily.

An petition was filed under Article 226 of the Constitution of India where the petitioner challenged a detention order and a subsequent show-cause notice by the Revenue Department. The initial reason for detention was the absence of valid documents accompanying the goods in transit from Patna to Aligarh. However, the show-cause notice introduced a new reason related to the GSTR 2A form.

A Division Bench of Justice Siddhartha Varma and Justice Shekhar B. Saraf held, “It is trite law, settled by a catena of Supreme Court judgments, that the Revenue cannot beat around the bush and keep changing the goal post at each stage. Once the Revenue had taken a particular stand, the same cannot be completely changed and/or supplemented by a different reason or ground.

Advocate Aditya Pandey appeared for the Petitioner.

The petitioner's counsel cited several judgments, emphasizing that detaining goods without valid documents was illegal and arbitrary. They also referred to a Supreme Court decision stating that an order's validity is based on the reasons provided and cannot be supplemented later.

The respondent's counsel argued that under the U.P. Goods and Service Tax Act, 2017, valid documents were mandatory during transit, citing a Supreme Court judgment to support this stance.

The Court observed that Revenue cannot change its grounds for detention arbitrarily. The initial reason given for detention was not mentioned in the subsequent show-cause notice, indicating a clear change in stance by the Revenue Department.

Consequently, the detention and subsequent actions were deemed illegal and were set aside. The Court directed the Revenue to release the goods and the vehicle within seven days. Although the Revenue's actions seemed mala fide, the Court refrained from imposing costs due to the respondent's counsel's request.

Cause Title: Jitendra Kumar v. State of U.P. & Anr., [2023:AHC:238333-DB]

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