M/s. Caterpillar India Pvt Ltd Vs State Tax Officer (Madras High Court)
According to the respondents in all writ petitions, the confiscation of the goods is perfectly in order as the petitioners have, admittedly, transported the consignments without valid E-way bills, thus violating clause (iv) of Section 130(1) above being, a contravention of the Act/Rules with the intent to evade tax. There is, no doubt, a violation in the present case, but one that has no revenue (tax) implications, seeing as the petitioners have remitted the taxes upon the consignments in full, under protest and pending adjudication. The question of determination of tax, if any, is, of course, left open to the authorities, to be determined in accordance with law.
As far as the determination of penalty is concerned, it is the Assessing Officer / State Tax Officer who is the competent and proper person for such determination/quantification. However, a holistic reading of the statutory provisions and the Circular noted above, indicates to me that the Department does not paint all violations/transgressions with the same brush and makes a distinction between serious and substantive violations and those that are minor/procedural in nature. Though the petitioners have been issued notices in terms of Section 129 (4) of the Act calling upon them to appear for adjudication, they have not responded to the same. The petitioners are thus directed to appear before the first respondent on 06.03.2019 at the first instance, for commencement of proceedings for adjudication. The question of whether the movement of the consignments sans valid E-way bills constitutes a substantive error or a mere technical breach shall be considered by the Assessing Officer, having regard to the provisions of Sections 122, 125 and 126 of the Act as well all relevant Instructions and Circulars issued by the Board, including the Circular extracted above. Let the officer also bear in mind that E-way bills, though stale, had, in fact, accompanied the consignments. The assessees/petitioners have offered explanations in regard to the circumstances that caused the documents to expire and such explanations will be taken into consideration by the officer in determining the quantum of penalty to be levied.
As far as the consignments in the case of Caterpillar (W.P.Nos.5075, 5076, 5078, 5081, 5185 and 5189 of 2019) are concerned, while I am inclined to order their immediate release, the interests of the Department must remain protected. The penalty is quantified, for the moment, and solely for the purposes of this order, 100% of the tax. The goods shall be released forthwith, upon condition that Caterpillar furnish a Bank Guarantee(s) for a sum of Rs.3,84,30,193/- in favour of the detaining Authority prior to such release. Proceedings for adjudication shall be completed within a period of six weeks from the date of initial hearing, being 03.2019.
It is agreed by the Transporter as well as the Revenue that, as far as the Transporter is concerned, a sum of Rs. 7,16,168/- has been remitted covering the tax as well as penalty and the goods have already been released. Therefore, as far as the case of Transporter (W.P.No.5128 of 2019) is concerned, proceedings for adjudication shall go on and shall be completed within a period of four weeks from the date of initial hearing, being 06.03.2019. Upon conclusion thereof, the amount paid by the petitioner shall be adjusted against the demand of tax and penalty determined in assessment.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
Writ Petitions filed under Article 226 of the Constitution of India to issue a Writ of Certiorari calling for the records relating to the Impugned order/notice in Form GST MOV-06; GST MOV-07; GST MOV -06; GST MOV -07, GST MOV -06 and GST MOV -07, respectively (all) dated 11.02.2019, passed by the 1st Respondent and to quash the same.
Prayer in W.P.No.5128 of 2019:- Writ Petitions filed under Article 226 of the Constitution of India to issue a Writ of Certiorari to call for the records of the respondent pertaining to the impugned proceedings Vide OR.828/ 2018-19/ RS-V(E) dated 04.02.2019 and to quash the same.
For Petitioner in W.P.Nos. 5075, 5076, 5078, 5081, 5185 & 5189 of 2019: Mr. Raghavan Ramabadran, for, M/s. Lakshmi Kumaran & Sridharan Attorneys.
For Petitioner in W.P.No.5128/2019: Mr. B.Raveendran
For Respondents in all W.Ps.: Mr. Mohamad Shafiq, CGSC, for, Mr. V.Haribabu, AGP., (Taxes)
COMMON ORDER
In W.P.Nos. 5075, 5076, 5078, 5081, 5185 and 5189 of 2019, the petitioner (Caterpillar India Private Limited) prays for the issuance of writs of certiorari to quash orders dated 11.02.2019 passed by the first respondent in Form GST MOV-06; GST MOV-07; GST MOV-06; GST MOV-07, GST MOV-06 and GST MOV-07. In W.P.No.5128 of 2019 the petitioner (William Henry) prays for the issuance of a writ of certiorari to quash order dated 04.02.2019 passed by the respondent in Proceedings No.OR.828/ 2018-19/ RS- V(E).
2. Though all writ petitions were directed to be listed today, only W.P.Nos.5075, 5076, 5128, 5185 and 5189 of 2019 were listed and W.P.Nos.5078 and 5081 were omitted. Hence, at request of the learned counsel appearing for both sides to the effect that all the writ petitions dealt with identical issues, a special list was directed to be issued listing all the matters. It is hence that all the writ petitions have been listed together and are taken up for hearing.
3. The writ petitions are segregated into two sets, one, W.P.Nos. 5075, 5076, 5078, 5081, 5185 and 5189 of 2019 filed by Caterpillar India Private Limited (referred to henceforth as ‘Caterpillar’) and the other, W.P.No.5128 of 2019 filed by William Henry, a Transporter, and referred to, as such.
4. Heard R.Raghavan Ramabadran, learned counsel appearing for Caterpillar, Mr.B.Raveendran, learned counsel appearing for the Transporter and Mr.Mohamad Shafiq, learned Central Government Standing Counsel, appearing for the respondents, in all the writ petitions.
5. Caterpillar has, admittedly, transported consignments of ‘Off Highway trucks’ taxguru.in that are zero rated in terms of Section 18 of the IGST, without valid and necessary E-way bills accompanying the The case of the petitioner is that along with the Tax Invoice, an E-way bill dated 08.02.2019 was originally generated. However, the consignments required special police permission for their movement between the hours of 11 p m and 5 a m. Though sought, the police permission was delayed, by which time the E-way bill, the validity of which is four (4) hours only, had expired. It is explained that the police permission had not been received in time on account of the intervening weekend. The permission was received on 11.02.2019 and the goods moved thereafter, admittedly, unaccompanied by valid E-way bills. The consignments were intercepted on 11.02.2019 in the course of movement to the Port for shipping when it was found by the authorities that there was no valid E-way bill accompanying the same.
6. In the case of the Transporter, an E-way bill was generated on 02.11.2018. However, there was a break-down of the lorry, due to which, he was unable to move the consignment within the period of validity of the document.
7. Thus, in both cases, admittedly consignments have moved without valid E-way bills accompanying the same. The respondents thus detained the consignments in terms of the proviso to Section 129 (1) of the Central Goods and Services Tax Act, 2017 (in short ‘Act’).
8. A notice was thereafter issued, specifying the tax and penalty payable on 14.02.2019 in the case of Caterpillar and on 02.2019 in the case of the Transporter proposing tax and equal penalty for the violation detected. Section 129(3) of the Act states that the Proper Officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c) after affording an opportunity of personal hearing as stipulated in terms of Section 129 (4) of the Act. Notices as aforesaid have admittedly have been issued to both Caterpillar as well as the Transporter. However neither party has appeared before the respondents, choosing instead to approach this Court directly by way of the present writ petitions seeking release of the goods pending adjudication of proceedings.
Detailed arguments of the learned counsels have been taken into account and the relevant provisions of the Act have been discussed.
The provisions relating to renewal/cancellation of E-way bill are provided under Rule 138 (10) of the Central Goods and Services Tax Rules, 2017, reading as follows:-
‘R. 138
(10) An e-way bill or a consolidated e-way bill generated under this rule shall be valid for the period as mentioned in Column (3) of the Table below from the relevant date, for the distance, within the country, the goods have to be transported, as mentioned in column (2) of the said Table:-
