Delhi District Court
Arun Bansal vs Barot Manishbhai Pravin Chandra on 10 November, 2025
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-11 CENTRAL, THC, DELHI
CS Comm. No.569/2024
Arun Bansal
S/o C.M Bansal
Sole Proprietor of
M/s New Northways Transport Organisation
Having office at 17, Gokhle Market,
Tis Hazari, Delhi-110054 .............Plaintiff
Vs.
Barot Manishbhai Pravin Chandra
Proprietor of M/s Shayona Health & Hygiene Care Product
Having office at: 401, Arya kanya Road,
Karelibaug, Vadodara, Dumad Chokadi, Dumad Road,
National Highway No. 8 Vadodara, Gujarat-390018 ............Defendant
Date of Institution : 07.05.2024
Date of Final Arguments : 10.11.2025
Date of Judgment : 10.11.2025
Decision : Decreed
Judgment
1. This suit is filed by plaintiff for recovery of Rs.6,27,612/- alongwith
interest @18% per annum as unpaid dues of logistic services
(transportation) provided to the defendant.
Case of the Plaintiff
2. case of the plaintiff as per amended plaint and the documents filed is that
he is proprietor of M/s New Northways Transport Organization at Gokhle
Market, Tis Hazari, Delhi and is in the business of providing
transportation/logistic services. Defendant is proprietor of M/s Shayona
Health and Hygiene Care products at Vadodara, Gujarat. In the course of
business defendant approached the plaintiff for tranportation services
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
which were duly provided on demand through GST paid invoices. The
four invoices issued by plaintiff between 01.06.2021 and 05.02.2022
cumulatively valued Rs.7,23,148/-. Defendant is said to have paid only
Rs.95,536/-.
3. For the 4th invoice dated 05.02.2021 valued Rs.1,45,056/- defendant
issued 4 cheques which were dishonoured on presentation. Plaintiff was
maintaining a ledger as per which debit balance was Rs.6,27,612/-. It is
pleaded that defendant has admitted this liability in writing by
acknowledging the same under signatures and rubber stamp on the
plaintiff's copy of the ledger. When the dues were not cleared despite
repeated demands plaintiff issued legal notice dated 25.09.2023 which
was neither replied nor complied. It was followed by issuance of another
legal notice dated 12.10.2023 which too was not replied. Plaintiff
approached Central DLSA for Pre-Institution Mediation under Section
12A of Commercial Courts Act, 2015 where defendant did not
participate and Non-Starter Report dated 10.04.2024 was issued. In this
backdrop suit in hand has been filed for follwoing reliefs:
Prayer:
i. Pass a decree in favour of the plaintiff and against the defendant, thereby
directing the defendant to pay an amount of Rs.6,27,612/- towards freight charges
qua services being rendered by the plaintiff to the defendant, alongwith pendente
lite and future interest; from the date of filing of the suit till the date of realization
of the same, @18% per annum;
ii. Any other relief deemed fit and proper may also be given.
iii. Costs of the case may also be granted in favour of the Plaintiff.
4. Summons of the suit was served upon the defendant by registered post on
15.09.2024. When no WS was filed within 30 days, defendant's right to
file WS was closed and its defence was struck off on 19.11.2024.
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
5. Upon completion of pleadings following notional issues were identified
by this Court on 19.11.2024 and recasted the same on 21.04.2025 as
under:
Notional Issues:
i. Whether plaintiff is entitled to recovery of Rs.6,27,612/- alongwith interest
@18% per annum towards freight charges qua services rendered by
plaintiffs to the defendants? OPP
ii. Relief.
6. To prove his case plaintiff examined himself as PW1 Arun Bansal. Vide
affidavit Ex.PW1/A he deposed on the lines of plaint and exhibited
following documents:
i. Registration Certificate of proprietorship firm is Ex.PW1/P1;
ii. Copy of Aadhar Card of the plaintiff is Ex.PW1/P2;
iii. Details of bills raised by the plaintiff against the defendant are Ex.PW1/P3
(Colly.);
iv. Four cheques alongwith cheque returning memo are Ex.PW1/P4 (Colly.);
v. Acknowledgement letter is Ex.PW1/P5;
vi. Copy of legal notice dated 25.09.2023, postal receipts and tracking reports are
Ex.PW1/P6 (Colly.);
vii. Two return envelopes are Ex.PW1/P7 (Colly.);
viii. Copy of e-mail dated 25.09.2023 is Ex.PW1/P8;
ix. Copy of legal notice dated 12.10.2023, postal receipt and tracking report are
Ex.PW1/P9 (Colly.);
x. Returned envelopes are Ex.PW1/P10 (Colly.).
7. None appeared on behalf of defendant for cross-examining PW1. No
other witness was examined on behalf of plaintiff.
8. I have heard arguments of Sh. Ghan Shyam Mishra, Ld. Counsel for
plaintiff. None has appeared for defendant to argue the case. I have
perused the case file carefully.
9. Plaintiff has placed and proved on record the 3 bills Ex.PW1/P3 colly.
Perusal of the same shows that these 3 invoices dated 05.03.2021,
31.03.2021 and 01.06.2021 are for Rs.1,77,890/-, Rs.2,18,347/- and
Rs.1,81,765/- respectively. Even though these bills pertains to the period
post promulgation of Goods and Services Act, 2017 made effective from
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
01.07.2017 but no GST is found to have been paid by the transporter
despite the fact that he is registered with the GST having GST no.
07AIZPB1423D1ZJ. All the three invoices carry a remark on the bottom
which reads "Remarks: GST paid by customer".
10.A query was raised by this Court with Ld. Counsel for plaintiff that the
invoice filed and relied by the plaintiff does not appear to be in
compliance of Section 31 CGST ACT, 2017 and Rule 46 of CGST
Rules, 2017 which are reproduced as under:
Section 31. Tax invoice.-
(1) A registered person supplying taxable goods shall, before or at the time of,-
(a) Removal of goods for supply to the recipient, where the supply involves movement
of goods; or
(b) Delivery of goods or making available thereof to the recipient, in any other case,
issue a tax invoice showing the description, quantity and value of goods, the tax
charged thereon and such other particulars as may be prescribed:
Provided that the Government may, on the recommendations of the Council, by
notification, specify the categories of goods or supplies in respect of which a tax
invoice shall be issued, within such time and in such manner as may be prescribed.
(2) A registered person supplying taxable services shall, before or after the provision of
service but within a prescribed period, issue a tax invoice, showing the description,
value, tax charged thereon and such other particulars as may be prescribed:
[Provided that the Government may, on the recommendations of the Council, by
notification,-
(a) Specify the categories of services or supplies in respect of which a tax invoice
shall be issued, within such time and in such manner as may be prescribed;
(b) Subject to the condition mentioned therein, specify the categories of services in
respect of which-
(i) Any other document issued in relation to the supply shall be deemed to be a
tax invoice; or
(ii) tax invoice may not be issued.]
(3) Notwithstanding anything contained in sub-sections (1) and (2)-
(a) A registered person may, within one month from the date of issuance of certificate
of registration and in such manner as may be prescribed, issue a revised invoice
against the invoice already issued during the period beginning with the effective
date of registration till the date of issuance of certificate of registration to him;
(b) A registered person may not issue a tax invoice if the value of the goods or
services or both supplied is less than two hundred rupees subject to such
conditions and in such manner as may be prescribed;
(c) a registered person supplying exempted goods or services or both or paying tax
under the provisions of section 10 shall issue, instead of a tax invoice, a bill of
supply containing such particulars and in such manner as may be prescribed:
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
Provided that the registered person may not issue a bill of supply if the value of the
goods or services or both supplied is less than two hundred rupees subject to such
conditions and in such manner as may be prescribed;
(d) A registered person shall, on receipt of advance payment with respect to any
supply of goods or services or both, issue a receipt voucher or any other
document, containing such particulars as may be prescribed, evidencing receipt
of such payment;
(e) where, on receipt of advance payment with respect to any supply of goods or
services or both the registered person issues a receipt voucher, but subsequently
no supply is made and no tax invoice is issued in pursuance thereof, the said
registered person may issue to the person who had made the payment, a refund
voucher against such payment;
(f) a registered person who is liable to pay tax under sub-section (3) or subsection
(4) of section 9 shall 2[, within the period as may be prescribed,] issue an invoice
in respect of goods or services or both received by him from the supplier who is
not registered on the date of receipt of goods or services or both;
(g) a registered person who is liable to pay tax under sub-section (3) or subsection
(4) of section 9 shall issue a payment voucher at the time of making payment to
the supplier.
2[Explanation.--For the purposes of clause (f), the expression "supplier who is not
registered" shall include the supplier who is registered solely for the purpose of deduction of
tax under section 51.]
(4) In case of continuous supply of goods, where successive statements of accounts or
successive payments are involved, the invoice shall be issued before or at the time
each such statement is issued or, as the case may be, each such payment is received.
(5) Subject to the provisions of clause (d) of sub-section (3), in case of continuous supply
of services,-
(a) Where the due date of payment is ascertainable from the contract, the invoice
shall be issued on or before the due date of payment;
(b) Where the due date of payment is not ascertainable from the contract, the invoice
shall be issued before or at the time when the supplier of service receives the
payment;
(c) where the payment is linked to the completion of an event, the invoice shall be
issued on or before the date of completion of that event.
(6) In a case where the supply of services ceases under a contract before the completion
of the supply, the invoice shall be issued at the time when the supply ceases and such
invoice shall be issued to the extent of the supply made before such cessation.
(7) Notwithstanding anything contained in sub-section (1), where the goods being sent or
taken on approval for sale or return are removed before the supply takes place, the
invoice shall be issued before or at the time of supply or six months from the date of
removal, whichever is earlier.
Explanation.-For the purposes of this section, the expression "tax invoice" shall
include any revised invoice issued by the supplier in respect of a supply made earlier.
Rule 46 Tax invoice.-
Subject to rule 54, a tax invoice referred to in section 31 shall be issued by the registered person
containing the following particulars, namely,-
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
(a) Name, address and Goods and Services Tax Identification Number of the supplier;
(b) A consecutive serial number not exceeding sixteen characters, in one or multiple series,
containing alphabets or numerals or special characters- hyphen or dash and slash
symbolised as "-'' and "/" respectively, and any combination thereof, unique for a
financial year;
(c) date of its issue;
(d) Name, address and Goods and Services Tax Identification Number or Unique Identity
Number, if registered, of the recipient;
(e) name and address of the recipient and the address of delivery, along with the name of the
State and its code, if such recipient is un-registered and where the value of the taxable
supply is fifty thousand rupees or more;
(f) name and address of the recipient and the address of delivery, along with the name of the
State and its code, if such recipient is un-registered and where the value of the taxable
supply is less than fifty thousand rupees and the recipient requests that such details be
recorded in the tax invoice
in cases involving supply of online money gaming or in cases] that where any taxable service
is supplied by or through an electronic commerce operator or by a supplier of online
information and database access or retrieval services to a recipient who is un-registered,
irrespective of the value of such supply, a tax invoice issued by the registered person shall
contain the 9[name of the state of the recipient and the same shall be deemed to be the
address on record of the recipient]];
(g) Harmonised System of Nomenclature code for goods or services;
(h) description of goods or services;
(i) Quantity in case of goods and unit or Unique Quantity Code thereof;
(j) Total value of supply of goods or services or both;
(k) Taxable value of the supply of goods or services or both taking into account discount or
abatement, if any;
(l) Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess );
(m) Amount of tax charged in respect of taxable goods or services (central tax, State tax,
integrated tax, Union territory tax or cess );
(n) Place of supply along with the name of the State, in the case of a supply in the course of
inter-State trade or commerce;
(o) Address of delivery where the same is different from the place of supply;
(p) Whether the tax is payable on reverse charge basis; and
(q) Signature or digital signature of the supplier or his authorised representative; and
(r) Quick Response code, having embedded Invoice Reference Number (IRN) in it, in case
invoice has been issued in the manner prescribed under sub-rule (4) of rule 48].
(s) a declaration as below, that invoice is not required to be issued in the manner specified
under sub-rule (4) of rule 48, in all cases where an invoice Is issued, other than in the
manner so specified under the said sub-rule (4) of rule 48, by the taxpayer having
aggregate turnover in any preceding financial year from 2017-18 onwards more than the
aggregate turnover as notified under the said sub-rule (4) of rule 48-
"I/We hereby declare that though our aggregate turnover in any preceding financial year
from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of
rule 48, we are not required to prepare an invoice in terms of the provisions of the said
sub-rule."]
[Provided that the Board may, on the recommendations of the Council, by notification, specify-
(i) The number of digits of Harmonised System of Nomenclature code for goods or services
that a class of registered persons shall be required to mention; or
(ii) A class of supply of goods or services for which specified number of digits of Harmonised
System of Nomenclature code shall be required to be mentioned by all registered
taxpayers; and
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
(iii) The class of registered persons that would not be required to mention the Harmonised
System of Nomenclature code for goods or services:]
[Provided further that in the case of] the export of goods or services, the invoice shall carry an
endorsement "SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR
AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATED TAX" or "SUPPLY MEANT FOR
EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS UNDER
BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX", as the case
maybe, and shall, in lieu of the details specified in clause (e), contain the following details, namely,-
(i) Name and address of the recipient;
(ii) Address of delivery; and
(iii) Name of the country of destination:]
Provided also that a registered person 5[other than the supplier engaged in making supply of services
by way of admission to exhibition of cinematograph films in multiplex screens,] may no tissue a tax
invoice in accordance with the provisions of clause (b) of sub-section (3) of section 31 subject to the
following conditions, namely,-
(a) The recipient is not a registered person; and
(b) The recipient does not require such invoice, and
Shall issue a consolidated tax invoice for such supplies at the close of each day in respect of all such
supplies.
[Provided also that the signature or digital signature of the supplier or his authorised representative
shall not be required in the case of issuance of an electronic invoice in accordance with the provisions
of the Information Technology Act,2000 (21 of 2000):]
[Provided also that the Government may, by notification, on the recommendations of the Council, and
subject to such conditions and restrictions as mentioned therein, specify that the tax invoice shall have
Quick Response (QR) code.]
11.In his submission made by Ld. Counsel for plaintiff, Ld. Counsel after
carrying out consultation with his client, made a submission at Bar that
services provided by Goods Transport Agencies for transportation of
goods is exempted from payment of goods and services tax under GST
Act, 2017. In support of the plea Ld. Counsel for plaintiff has relied on
Notification no. 13/2017-Central Tax (Rate) dated 28.06.2017 whereby
Department of Revenue, Ministry of Finance, Govt. of India are in
exercise of powers under Section 11 of CGST Act, 2017 and claimed to
have exempted Goods Transport Agency from paying GST for
transportation of goods. It was submitted that it is the recipient of such
service who is supposed to pay GST on Reverse Charge
Basis/Mechanism.
12.For ready reference extract of the above circular is reproduced hereunder:
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
13.Relying on the above circular Ld. Counsel submits that it is for the
defendant who was supposed to pay GST on the above referred unpaid
invoices. On a query raised by this Court Ld. Counsel accepted that he has
not filed anything on record to show that defendant had actually paid GST
on the above amount or not. Rather it was submitted that the very fact that
defendant has not paid the plaintiff his transportation charges it is very
unlikely that he must have deposited the GST to the GST Department in
Surat or Delhi and that summoning a witness from Surat or Delhi in this
regard may not throw any light in this regard.
14.The term "Goods" stands defined in Section 2 (52) of CGST Act, 2017
which reads as under:
"Goods means every kind of movable property other than money and securities but include actionable
claim, growing crops, grass and things attached to or forming part of the land which are agreed to be
severed before supply or under a contract of supply."
15.The term "Goods Transport Agency" is not defined under the Act.
However as per Notification No. 11/2017- Central Tax (Rate) dated
28.06.2017 while describing the terms supporting services in transport it
was notified
"Goods Transport Agency means any person who provide service in relation to transport of goods by
road and issues consignment note, by whatever name called. The extract of the notification is
reproduced hereunder:
SI No. Chapter, Section Description of Service Rate (per cent) Condition
or Heading
11 Heading 9967 (i) Services of goods transport Provided that
(Supporting agency (GTA) in relation to credit of
services in transportation of goods input tax
transport) (including used household charged on
goods for personal use). goods and
Explanation:- "goods transport services used
agency" means any person who 2.5 in supplying
provides service in relation to the service
transport of goods by road and has not been
issues consignment note, by taken
whatever name called [(Please refer
to
(ii) Supporting services in Explanation
transport other than (i) above no. iv)]
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
16.Although there are no qualms that a transport service provider is supplier
of services covered under CGST Act, 2017 but it would be appropriate to
have a glance at the definition of term "Supplier" under the Act.
Section 2 (105): Supplier in relation to any goods or services or both, shall mean the person
supplying the said goods or services or both and shall include an agent acting as such on
behalf of such supplier in relation to the goods or services or both supplied.
17.During the course of arguments Ld. Counsel for plaintiff Sh. Mishra
accepted that it is not his case that transport services /logistic services are
enbloc exempted from paying GST but all that he wishes to impress upon
is that it is the recipient of the service who is supposed to pay the tax and
not the transporter.
18.In so far as the matter pertained to loss of revenue to the Exchequer and
the circular cited by Ld. Counsel for plaintiff was found to be wanting in
explaining as to how the Reverse Charge Mechanism work in such cases
where the actual service provider i.e. the transporter does not pay any
GST and shifts the burden on the recipient of the service while the
recipient is silent on the aspect of payment of requisite GST, this Court
found it appropriate to summon an expert witness from the Central GST
Department. Consequently Sh. Trivendra Singh, Superintendent,
Central GST, CR Building, ITO, Delhi was summoned in the Court
through their counsel Sh. Sanyat Lodha, Ld. Standing Counsel for Central
GST who was appearing in the Court in other unrelated matter.
19.It would be appropriate to reproduce the statement made by this expert
witness to understand as to whether transportation/logistic services
providers are exempted from paying any GST as initially submitted by
Ld. Counsel for plaintiff with the transporter and as to how the method of
Reverse Charge Mechanism and for that matter the Forward Charge
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
Mechanism works vis-a-vis the transport service providerrs referred to as
GTA i.e. Goods Transport Agency. The same is reproduced as under:
CS (Comm.) No. 569/2024
Arun Bansal Vs. Barot Manishbhai Pravin Chandra
29.07.2025
CW-1 Statement of Sh. Trivendra Singh, Superintendent, Central GST, CR Building,
ITO, Delhi.
ON SA
I am working as Superintendent with CGST Department. Today, I have
appeared in the Court on the Court's direction as an expert witness to share procedure
and law qua levying Goods & Services Tax (GST) on transporter i.e. Goods Transport
Agency i.e. GTA. As per General Exemption Notification No. 12/2017, the normal
transporters are exempted from depositing/advance payment of Goods & Services Tax
under CGST Act, 2017. There is no exemption for GTAs.
The difference between normal transporter and GTA is that a normal
transporter is not supposed to issue a consignment note which is primarily a goods
receipt/builty issued under Form 8 of Carriage by Road Rules, 2011 whereas for a GTA
issuance of a consignment note/builty is mandatory.
The difference in the two scenarios lies in the fact the once a GTA issues
a consignment note the legal responsibility of safe transportation of the
consignment/goods would lie on the GTA which shall not be the case in case of normal
transporter. However, e-way bill is mandatory for both normal transporter as well as
GTA.
The only mode of distinguishing a normal transporter and GTA is
primarily that GTA issues consignment note/builty while a normal transporter issues a
normal receipt and not a proper consignment note/builty. Further, a GTA is always
registered with GST Department and has a dedicated GST number issued by GST
Department.
By referring to above Notification No. 12/2017, I can say that all normal
transporter are exempted from paying GST while GTAs are liable to pay GST. In case of
Forward Charge Arrangement i.e. where the consignor or seller is engaging the services
of GTA, the such seller or consignor is liable to pay GST on the transportation bill. In
such a case the GTA will include the GST amount in the transport bill and collect it from
the consignor and deposit it with the GST Department.
In so far as if the seller of the goods is engaging the transportation
services and is making payment to the transporter he becomes recipient of the
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transportation services of the GTA and he can pay GST by Reverse Charge Mechanism
in case such seller is a partnership firm or a company or any such other legal entity.
In case of Reverse Charge Mechanism, it is the consignee who is
supposed to pay the transportation charges to the GTA and accordingly, requisite GST
shall also be paid by the consignee i.e. recipient of such service. In such case in case the
GTA is collecting GST from the consignee, he will mention the same in the transportation
invoice by including the same. However, in case it is agreed that the GST shall be paid by
the consignee as per Reverse Charge Mechanism, the GTA will simply add a mention in
the invoice that GST is payable by consignee. However, like in Forward Charge
Mechanism, Reverse Charge Mechanism facility is available for a partnership firm or a
company or any such other legal entity.
In case a normal transporter issues a invoice without adding any GST
component, under the GST Laws it is presumed that the invoice value includes GST i.e.
5% or 12% as applicable.
I am placing two Notifications bearing Notification No. 12/2017-Central
Tax (Rate) and 13/2017-Central Tax (Rate) both dated 28.06.2017 on record.
RO & AC
(SURINDER S. RATHI)
District Judge
Commercial-11
Central District, THC,
Delhi/29.07.2025
20.Plain reading of the above statement of the Expert Witness shows that the
transport service providers are classified in two categories first being
"Normal Transporter" and second being Goods Transport Agency.
21.According to the expert witness a Normal Transporter is not registered
with GST deparment and is not supposed to issue a Consignment
Note/Goods Receipt/Bilty under Form 8 of Carriage by Road Rules,
2011 whereas a GTA is registered with GST department having dedicated
GST no. and is bound in law to issue the GR/Bilty as per form provided
under the above rule. The expert witness added that the mandatory
requirement of issuance of e-way bill is binding both for Normal
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Transporter as well as GTA and as such the only differentiating factor is
issuance of GR/bilty.
22.While referring to CGST Notification No. 12/2017 the expert stated that
a Normal Transporter is exempted from paying any GST while all GTAs
are liable to pay GST.
23.While explaining the Forward Charge Mechanism (FCM) for payment
of GST in such cases he stated that when the services of a GTA is availed
by the seller of the goods i.e. consignor, it is this consignor who is liable
to pay GST on the transportation bill. Likewise, in case the services of a
GTA is availed by buyer of the goods i.e. consignee, the consignee
becomes the recipient of the service and is liable to pay the GST.
Accordingly, in case of FCM the GTA is supposed to include the payable
GST amount in the transportation invoice/bill and collect it from the
seller/consignor or buyer/consignee, as the case may be, and deposit it
with the GST Department.
24.While explaining Reverse Charge Mechanism (RCM) the GST expert
CW1 Mr. Singh deposed that if the services of the GTA is engaged by the
seller/ consignor or buyer/consignee with an understanding that it is they
who would be paying the GST, all that the GTA is supposed to do is to
simply mention in the invoice that "GST is payable by consignor" or
"GST is payable by consignee", as the case may be, as per terms agreed.
25.Reference with regard to Recipient of Service can be made to explanation
available in CGST Notification No. 13/2017 dated 28.06.2017. The same
is reproduced hereunder for ready reference:
Explanation.- For purpose of this notification,-
(a)The person who pays or is liable to pay freight for the transportation of goods by
road in goods carriage, located in the taxable territory shall be treated as the person
who receives the service for the purpose of this notification.
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(b) "Body Corporate" has the same meaning as assigned to it in clause (11) of section 2
of the Companies Act, 2013.
(c) the business entity located in the taxable territory who is litigant, applicant or
petitioner, as the case may be, shall be treated as the person who receives the legal
services for the purpose of this notification.
(d) the words and expressions used and not defined in this notification but defined in the
Central Goods and Services Tax Act, the Integrated Goods and Services Tax Act, and
the Union Territory Goods and Services Tax Act shall have the same meanings as
assigned to them in those Acts.
26.The expert witness added that the facility of Forward Charge
Mechanism (FCM) and Reverse Charge Mechanism (RCM) is
available only for GST registered entities which can either be individuals,
partnership firms, companies and other legal entities. He added that since
a Normal Transporter is not registered with GST, an invoice raised by him
without a specific mention of GST component, it is presumed that the
services provided by him already includes GST @5% or 12% as
applicable.
27.Coming to the facts of this case, admittedly, plaintiff herein is a registered
GTA having a dedicated GST no. He has relied on three invoices
Ex.PW1/P3 but has not been added GST in either of the three invoices.
This shows that he did not avail Forward Charge Mechanism whereunder
he was supposed to include the GST and collect it from either the seller of
the goods i.e. consignor or buyer of the goods i.e. consignee. Rather the
fact that the invoices shows that GST is to be paid by customer which in
the case in hand the defendant shows that the plaintiff adopted the
Reverse Charge Mechanism as defendant, buyer of the goods was the
recipient of the transportation services. As discussed supra, the fact that
the defendant, recipient of the transportation services did not pay up the
GTA, he also did not pay up the requisite GST. A direction was issued by
this Court to the plaintiff that in case plaintiff wishes that this Court
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
should rely on the three invoices Ex.PW1/3, he should pay the applicable
GST on the combined invoice value. During the course of final arguments
Court was apprised that a GST for a sum of Rs.31,381/- stands paid by the
plaintiff to the GST Department on 06.11.2025. The copy thereof is
accepted on record. The Court is apprised that the GST is calculated and
paid as if it is a case of Forward Charge Mechanism instead of Reverse
Charge Mechanism and as such plaintiff may be entitled to recovery of
this amount in addition to the suit amount.
28.In so far as the matter has already reached the final arguments stage and
the above Rs.31,381/- was deposited by the plaintiff GTA and GST under
direction of this Court to mitigate the loss caused to the Exchequer by the
defendant by not paying the GST as per Reverse Charge Mechanism,
plaintiff shall be entitled to recovery of this amount in addition to the suit
amount.
29.The evidence in this case is primarily documentary. The documents relied
upon by the plaintiff are the documents maintained by a company in the
ordinary course of its business. Though the exceptions cannot be ruled
out, but generally taking a judicial notice of the business, these documents
can be considered to be duly executed in due course of the business and
capable of binding the parties into a contractual relationship.
30.The pleadings in the plaint and annexed documents have remained
unrebutted, unchallenged and uncontroverted. In the absence of any
plausible denial on behalf of defendant, case of the plaintiff is deemed to
be admitted. On the basis of pleadings, evidence led and the documents
exhibited plaintiff has discharged the onus of proving his case.
31.It is submitted that the plaintiff had issued a legal notice to the defendant
containing all the necessary facts which remained unreubtted as no reply
was sent. Law in this regard is well-settled. As per case titled Jayam
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CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
Company Vs. T. Ravi Chandaran 2003 (3) RCR (Cr.) 154 Madras
presumption is drawn against defendant that they have admitted the
contents of the legal notice.
32.In another case titled as Metropolis Travels & Resorts (I) Pvt. Ltd. Vs.
Sumit Kalra and Ors., 2002 Latest Caselaw 714 Del wherein it was
observed that :
"13. There is another aspect of the matter which negates the argument of the
respondent and that is that the appellant served a legal notice on the respondent
vide Ex. PW1/3. No rely to the same was given by the respondent. But in spite of the same, no adverse inference was drawn against the defendant. This court in the case of Kalu Ram Vs. Sita Ram 1980 RLR 44 observed that service of notice having been admitted without reservation and that having not been replied in that eventuality, adverse inference should be drawn because he kept quite over the notice and did not send any reply. Observations of Kalu Ram's case (supra) apply on all force to the facts of this case. In the case in hand also despite receipt of notice, respondent did not care to reply nor refuted the averments of demand of theamount on the basis of the invoices/ bills in question. But the Ld. Trial court failed to draw inference against the respondent".
(Emphasis Supplied)
33.Ld. Counsel for plaintiff has also relied upon case titled as Krishan Kumar Aggarwal Vs. Life Insurance Corporation 2010 Latest Caselaw 3344 Del wherein Hon'ble Delhi High Court observed that:
"65. No explanation has been rendered by the respondent as to why letter dated 23rd August, 2008 and the legal notice send by the appellant were not repudiated or even replied. Despite due receipt, the respondent did not bother to even send any response to the letter dated 23 rd August, 2008 or the legal notice, the contents whereof would be deemed to have been admitted. In the judicial precedents reported in Rakesh Kumar Vs. Hindustan Everest Tool Ltd. MANU/SC0396/1988:
(1988) 2 SCC 165 & Hirallal Kapur Vs. Prabhu Chaudhary MANU/SC/0189/1988 : (1988) 2 SCC 172 it was held by the Supreme Court that a categorical assertion by the landlord in a legal notice if not replied to and controverted, can be treated as an admission by a tenant.
"66. In a Division Bench proceedings of this court reported in Metropolis Travels and Resorts Vs. Sumit Kalra MANU/DE/0562/2002 : 98 (2002) DLT 573 (DB), no adverse inference was drawn against the respondent for failure to reply the legal notice on consideration of the facts and circumstances of the case. Reference was made to proceedings reported in Kalu Ram Vs. Sita Ram wherein it had been observed that service of notice being admitted without reservation and that having not been replied, in that eventuality, adverse inference should be drawn".
(Emphasis Supplied) Page 17 CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra
34.As per judgments of Division Bench of Hon'ble High Court of Delhi, plaintiff has been successful in showing on record that non-reply of legal notice by the defendant calls for drawing of presumption as to correctness of the facts contained therein.
Interest
35. Plaintiff has claimed interest @ 18%. The interest is payable as per Section 34 CPC. For ready reference, Section 34 CPC is reproduced hereunder:
Section 34 CPC: Interest
(i)"Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding 6% per annum as the Court deems reasonable on such principal sum from the date of the decree to the date of payment, or to such earlier date as the court thinks fit.
(ii).Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed 6% per annum but shall not exceed the contractual rate or interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions.
Explanation (i) In this sub-section, "nationalized bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970.
Explanation (ii) For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.
Where such a decree is silent with respect to the payment of further interest (on such principal sum) from the date of the decree to the date of the payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not lie.
(Emphasis Supplied)
36. Section 34 CPC provides that plaintiff will be entitled the interest at the rate at which Court finds reasonable. For a general suit, the rate of interest prescribed is 6% and for commercial suit, the Parliament promulgates that rate of interest may increase from 6% to a rate which is found reasonable.
Page 18 CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra Plaintiff is accordingly entitled to only the rate at which RBI has issued Circular for Commercial suits.
37. As far as the interest is concerned, rate applicable to Commercial transaction shall be payable. As per RBI notification dated 30.08.2022 issued vide Press Release no.2022-2023/794 whereby advisory issued by RBI to Schedule Commercial banks of accepting deposit rates @ 9.05% per annum.
Relief
38.In view of the above, suit of the plaintiff is decreed with cost for suit amount i.e. Rs.6,27,612 + Rs.31,381 (GST paid) = Rs.6,58,993/- alongwith 18% interest pendente lite and till realization. Plaintiff's lawyer's fees is assessed as Rs.50,000/-.
39.Before parting with this case this Court would like to place on record its appreciation for the able assistance and hard work put in by legal team of plaintiff and specially by Sh. Ghan Shaym Mishra and his associates, Sh. Sanyat Lodha, Ld. Standing counsel for CGST and CW1 Sh. Trivendra Singh for assisting the Court in understanding the nitty-gritties of FCM and RCM vis-a-vis the transportation services provided by GTA and Normal Transporter.
40.Before parting with the judgment this Court would like to bring on record a loose end in the statutory/procedural framework in collection of Goods and Services Tax in the transportation/logistic services industry. As per data available online the market size of logistic industry in the country in 2025 is Rs.33.69 lakh crore. Out of the same the Road Transport constitutes 60-65%, transportation by rail constitutes 25%, maritime/sea transportation is 8%, air transportation is around 1.5%. Even if the warehousing component is $USD 10 billion is reduced from the above figure the market size of logistics - warehousing in the country is Page 19 CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra Rs.32.80 lakhs crores. The applicable GST on the transporation services is in two heads i.e. 5% and 12%. The mean GST would come to around 8% which comes to Rs.2.62 lakh crore. The contribution of transport services other than logistics in the country GST opening is Rs.10-15% of the total GST revenue which comes to around Rs.12,000 to Rs.18,000 crores per month. The annual contribution of the transportation services industry is Rs.1.80 lakh crore which is around Rs.82,000 crore per annum less than the amount of GST it should generate for the country. While the above figures are only raw estimates but it does show that there is pilferage/evasion/theft of around Rs.82,000 crore which is around 34%. There can be several reasons which can be cited for explaining the above variation and non-payment of Rs.82,000 crore GST by transportation industry but in the case in hand this Court did found that in a very small logistic suit worth only Rs.6.50 lakhs the GST of more than Rs.31,000/- was evaded. By taking proactive action this Court did make plaintiff, a registered GTA with GST Department, pay Rs.31,381/- GST with the GST Department before deciding the suit.
41.Initially, there was a strong resistance on the part of the plaintiff, a transportation services provider and his Ld. Counsel since it took a stand that all kinds of transporters are exempted from paying any GST whatsoever. As discussed and concluded at length herein there is no straight jacket exemption from any transport services provider from payment of GST. Rather payment of GST is mandatory for all transport services.
42.This is not an isolated case since this Court has come across similar other cases where transportation invoices are issued in terms of Section 31 r/w Section 46 of GST Act, 2017 but no GST component is added. All such invoices just carry an endorsement "GST to be paid by Page 20 CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra seller/consignor/buyer/consignee". Apparently, these endorsements are actuated because of Reverse Charge Mechanism of payment of GST provided under the GST Act, 2017. The Reverse Charge Mechanism is devised for Advocates, Arbitral Tribunals and other skilled vocations like literary authors, publishers, music composers, photographers, artists and like. They stand in one group in unison and are starkingly different from services provided by a Transporter/GTAs as an organised Industry.
43.The above inclusion of GTAs and other transport services providers under Reverse Charge Mechanism has the potential of issuance of transport invoice worth Rs.3.62 lakhs crores without paying any GST at all. This is doable by simply making the endorsement that it shall be paid by a consignor or the consignee. This pre-supposition that the consignor and the consignee would actually pay up is ex-facie a loose end since it complicates the process of collection of requisite GST payable for such services. Inclusion of GTAs in CGST Notification dated 13/2017 dated 28.06.2017, the reason as to why there is a pilferage of Rs.82,000 Crore GST collection from this industry.
44.This can be understood by an illustration. A Consignor/seller based in Delhi can engage the services of a GTA based in Lucknow for transportation of goods to the consignee/buyer in Kolkata. The invoices issued by GTA in Lucknow would not follow the FCM by including the applicable GST in his invoice and collect it either from the consignor or from the consignee, as per agreed terms and deposit it with the GST Department but rather he would simply endorse that the consignor based in Delhi would pay up. Apparently, this becomes a herculean task that GST paid for service provider by Lucknow based GTA is to be checked "GST officials of Delhi or GST officials of Kolkata" which only Page 21 CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra complicates the matter enough legroom for evasion as found by this Court in this one suit.
45.In case the appropriate competent office and the GST Department or the policy makers ponder over this aspect and may contemplate removal of GTAs from Reverse Charge Mechanism by restricting it to FCM, this would go a long way in plugging the pilferage of around Rs.82,000 Crores of GST annually by the Transport Industry. This suggestion of the Court may be looked into and as such copy of this judgment may be sent to Finance Minister, Secretary, Ministry of Finance, Government of India and Chairman, GST Council for their consideration.
46.Decree sheet be prepared accordingly. File be consigned to Record Room after due compliance.
Digitally signed by SURINDER SURINDER S RATHI S RATHI Date:
2025.12.02 10:12:06 +0530 (SURINDER S. RATHI) District Judge, Commercial Court -11 Central District, THC Delhi/10.11.2025 Page 22 CS Comm. No.569/2024 Arun Bansal Vs. Barot Manishbhai Pravin Chandra