Delivery note is not a substitute to the prescribed delivery challan under GST
Here is a case of detention of Vehicle by the GST Authorities.
- ANIL JEWELLERS v. UT OF J&K TH. COMMISSIONER STATE TAXES JAMMU AND THE DEPUTY COMMISSIONER- J&K and Ladakh HC
Let us have a short overview of the case:
State Taxes Officer intercepted and detained a vehicle carrying the gold ornaments of the petitioner worth Rs.77,96,650.10/- under Section 68 (3) of the J&K Goods and Services Tax Act, 2017 at Civil Airport Road, Jammu.
The said officer on verification of the documents found that the gold ornaments were accompanied by delivery note which as per the respondents, was not a valid document for movement of goods.
In response to the notice, the petitioner expressed his consent to pay applicable tax and penalty whichever is applicable stating that the goods were meant for sale on approval basis for which delivery challan was issued by the supplier and the goods were accompanied by the letter from the consignor wherein it was written that the goods are on approval basis.
However, the copy of the same was misplaced by the courier agency.
On appeal, the Court has held as under:
The petitioner’s voluntary agreement in writing to pay both tax and penalty strongly suggests that the person in charge of the goods did not possess a valid delivery challan when the goods were intercepted by the State Tax Officer (STO).
The decision is based on two grounds viz. Non possession of valid delivery challan along with document substantiating the stand of the petitioner that it was sent for approval at the time of seizure of the goods and payment of tax and penalty voluntarily deposited by the petitioner at the time of release of the goods.
Conclusion:
A delivery note is a mere document that accompanies a shipment of goods. Delivery challan, on the other hand, is issued while making a delivery of goods to the buyer and have an impact on the inventory levels since it decreases the inventory stock.
