The Allahabad High Court ruled that the revenue's position stated in the detention order must remain consistent and cannot be altered in a subsequent show cause notice pertaining to proceedings stemming from the same goods' detention.

In nullifying both the detention order and the subsequent proceedings, the bench, led by Justice Siddhartha Varma and Justice Shekhar B. Saraf, affirmed their decision.

“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 has taken a particular stand, the same cannot be completely changed and/or supplemented by a different reason or ground.”

The petitioner's goods, en route from Patna to Aligarh, were halted during transit. The sole reason cited in the detention order was the absence of proper documentation accompanying the goods.

Yet, the Court noted a discrepancy: the show cause notice served to the petitioner lacked any reference to the reasons stated in the original detention order. Instead, it based its grounds on the suspension or cancellation of registration for four suppliers of the petitioner. The Court highlighted the complete absence of any mention of the reasons provided in the initial detention order.

Based on precedents such as the Gujarat High Court's ruling in F.S. Enterprise vs. State of Gujarat and the Allahabad High Court's decision in M/s. Gobind Tobacco Manufacturing Co. & Anr. vs. State of U.P. & Ors., the petitioner's counsel contended that the detention of goods could be deemed unlawful even if the seized goods were supported by mere photocopies of valid documents.

Additionally, the argument drew from the Supreme Court's judgment in Mohinder Singh Gill & Anr. vs. The Chief Election Commissioner, New Delhi & Ors. The court ruled that the justification for an authority's order must stem from the reasons explicitly stated within it. Any attempt to supplement or add to these reasons through an affidavit or other means was deemed impermissible.

The counsel representing the respondent defended the detention order and subsequent show cause notice by emphasizing the necessity to adhere to the prescribed procedure outlined in the GST Act. Citing the Supreme Court's decision in State of Uttar Pradesh vs. M/s. Kay Pan Fragrance Pvt. Ltd., the argument was made that the GST Act mandates the carriage of valid documents alongside goods during transit.

The Court observed that in the show cause notice there was “no whisper” of the reason that the goods were not accompanied by valid documents.

The Court ruled that the detention of the goods had caused substantial harm to the assessee. Deeming the detention illegal and the subsequent show cause notice flawed, the Court nullified both. While considering imposing costs, the Court refrained from doing so upon the request of the respondent's counsel.

Case Title: Jitendra Kumar v. State of U.P. and Another [WRIT TAX No. - 1425 of 2023]