Case Details:

Assistant State Tax Officer (Intelligence) vs. VST and Sons (P) Limited

Appeal No.:

WA No. 914 of 2021

Order pronounced by:

Kerala High Court

Date of Order:

22-07-2021

VST & Sons (P) Ltd. (First respondent) & Muthukumar Meenakshy (Second respondent) challenged the detention of ‘Range Rover’ motor vehicle belonging to the 2^nd respondent while being transported from Coimbatore to Thiruvananthapuram as ‘used personal effect’ of the 2^nd respondent.  The vehicle was detained on the allegation that the same was transported without the E-way Bill.

The only reason stated for detaining the goods was that it was transported without the E-way bill. It must be remembered that goods that are classifiable as used personal and household effect falls under Rule 138 (14) (a) of the Kerala GST Rules, 2017a and are exempted from the requirement of E-way bill. A temporary registration was also taken apart from the motor vehicle insurance. The vehicle was entrusted for transportation from Coimbatore to Thiruvananthapuram instead of driving the same across the State borders. The vehicle had in fact run 43 Kms but during transportation, the vehicle was detained for the reason of non-generation of e-way bill.

In the decision in KUN Motor Company’s case, the Division Bench of the Court had, in identical situation, observed as follows: -

• We do not understand how the State could take a contention that if the car had been driven into the State of Kerala from the U.T. of Puducherry; then there could not have been a detention under section 129, since there would have been no question of uploading E-way bill. We cannot also comprehend how an intra-state sale would be converted to an inter-state sale merely for reasons of it being transported in carriage.
• The incidence of tax is on the supply and not on the nature of transport. There is no distinction in so far as the I.G. & S.T. Act is concerned, of a supply by road or on carriage. We hence are of the opinion that the supply of the new vehicle by its authorised dealer terminated on it being purchased by the 2^nd appellant in Puducherry and the subsequent movement of goods was not occasioned by reason of the transaction of supply.

The goods having come into possession of the purchaser, and the vehicle having been used, howsoever negligible the distance run, we are also of the opinion that it is his “used personal effect” and there can be alleged no taxable transaction in so far as the movement of goods from Puducherry to Trivandrum in Kerala, especially since the car had been registered in the name of the purchaser.