Case Law Details
Saraf Trexim Limited Vs Deputy Commissioner Of State Tax And Ors (Calcutta High Court)
In a significant judgment, the Calcutta High Court provided relief to Saraf Trexim Limited in the case against the Deputy Commissioner of State Tax and Others, highlighting the critical nuances of the West Bengal Goods and Services Tax (WBGST) Act related to the transportation of goods and the validity of e-way bills. This article delves into the details of the case, where an expired e-way bill due to an unforeseen accident led to a substantial penalty, and the subsequent ruling by the Calcutta High Court that quashed the 200% penalty imposed on the appellant.
Detailed Analysis
The case revolves around Saraf Trexim Limited, which faced a hefty penalty under the WBGST Act for transporting goods with an expired e-way bill. The goods were being exported to Bangladesh, and due to an accident involving the transporting vehicle, the validity of the e-way bill expired before renewal. Upon interception by the authorities, it was discovered that the e-way bill had expired, leading to the imposition of a 200% penalty as per Section 129 of the WBGST Act.
The appellant argued that the delay in generating a new e-way bill was due to the accident and subsequent settlement between the involved parties, which was a genuine and unavoidable delay. The High Court, upon reviewing the facts and circumstances of the case, recognized the bona fides of the transaction and the unintentional delay caused by the accident. It was noted that similar cases had been adjudicated with a consideration for the intent behind the contravention of the e-way bill provisions.
Conclusion
The judgment rendered by the Calcutta High Court in favor of Saraf Trexim Limited sets a precedent for considering the genuine difficulties faced by businesses in adhering to the procedural timelines under the GST framework. The court’s decision to quash the 200% penalty underscores the importance of assessing the intent and circumstances behind such violations. This case highlights the judiciary’s role in ensuring that the application of tax laws does not unduly penalize businesses for uncontrollable or unforeseen events, thereby safeguarding the interests of the trade and commerce community. The ruling also emphasizes the need for a balanced approach in enforcing tax laws, where genuine errors and accidents are differentiated from deliberate attempts to evade taxes.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. This intra court appeal by the writ petitioner is directed against the order passed by the learned Single Bench dismissing the writ petition filed by the appellant challenging the order passed by the authorities imposing penalty under the provisions of the WBGST Act on the ground that the e-way bill generated by the appellant for transporting the articles for export to Bangladesh had expired and, therefore, on the date and time when the vehicle was intercepted, the vehicle did not have a valid e-way Therefore, penalty in terms of Section 129 of the Act has been imposed.
2. Affidavit-in-opposition has been filed by the department and reply has been filed by the appellant/writ petitioner.
3. We have elaborately heard the submissions of the learned advocate for the appellant and T.M. Siddique, learned Government counsel appearing for the respondent.
4. The undisputed facts are that the goods in question were transported by the appellant in the vehicle bearing Registration WB-27-2590 accompanied by an e-way bill generated on 11.06.2022. The e-way bill was valid upto midnight on 13.06.2022. On 14.06.2022 the vehicle was intercepted at about 5.30 p.m. The authorities found that the e-way bill had expired at 12 midnight on 13.06.2022 and fresh e-way bill has not been generated. Consequently, it was held that the goods were transported without a valid e-way bill. Though the appellant had sought to explain the lapse on the ground that the vehicle met to the accident and there was a settlement made between the owner of the motorcycle and the owner of the truck carrying the goods, this also had added to the delay in the process and in any event on 15.06.2022 the second e-way bill was generated and at the time when the vehicle was intercepted, hardly 24 hours had expired from the time at which the first e-way bill had expired. In similar matters court has taken a view that unless and until it is established by the department that the transporter of the goods or the owner of the goods had an intention to contravene the provisions of the Act, the question of imposing penalty under Section 129 of the Act that too 200% would not be justified. Each case has to be decided on the peculiar facts and circumstances and the court can definitely take into consideration the bonafide of the transaction and in the instant case the delay have been less than 24 hours.
5. We are of the view that it is not a case where penalty can be imposed that too 200%. The other factors which are also to be taken note of that the goods have been transported and the goods in question have been exported to Bangladesh.
6. Considering all these facts which we find to the peculiar case on hand, we are of the view that in the instant case no penalty can be imposed on the appellant.
7. Accordingly, the appeal is The order passed in the writ petition is set aside and the writ petition is allowed and the order of the penalty imposed on the appellant is set aside and quashed.
8. Since the appellant had paid the penalty during the pendency of the proceedings, the appellant is entitled to file an application for refund of the amount of the penalty collected which shall be considered and refund be effected as expeditiously as possible preferably within six weeks from the date of receipt of the server copy of this order.
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