It was held that :
1. Once the tax invoice is issued and the e way bill generated through online GST portal containing all details of the transactions and such details are available with the GST authorities, therefore the possibility of tax evasion is very remote.
2. It was held that the tax/ penalty under section 129 of CGST Act 2017 cannot be imposed merely on the basis of expiry of E way bill and without proving the intention to evade the tax.
3. The penalty order is illegal and against the fundamental principles of law
FULL TEXT OF THE JUDGMENT/ORDER OF APPELLATE AUTHORITY GST HIMACHAL PRADESH
1. At the outset, it is made clear that the provisions of both the Himachal Pradesh Goods and Service Tax Act, 2017 and Central Goods & Service Act, 2017 (hereinafter referred to as HPGST and CGST Act respectively) are the same. A reference to the HPGST Act would also mean a reference to the corresponding similar provisions under the CGST Act.
2. This appeal has been filed under section 107 of the HP Goods and Service Tax Act 2017 by M/s Hero steel Ltd. Hero Nagar Sua Road, Giaspura, Ludhiana, Punjab GSTN03AACCH46381.1ZK. (hereinafter also referred to Appellant) against the order no. EXNACSTF/B13N-13ADD1/201-20/246 dated 08.07.2019 passed by the Assistant Commissioner State Faxes & Excise. Flying Squad Baddi. HP vide which an additional demand of Rs 5,84.766/-. has been created under section 129(3) of CGST/HPGST Act 2017 read with section 20 of IGST Act 2017.
3. The said appeal has been acknowledged vide number 061/2019-20 dated 03.10.2019. The instant appeal case has been heard by the earlier Appellate Authority GST HP on dated 24.02.2020 and 07-08-2020. The appeal case was listed for argument on 23.07.2022 by me and the judgment was reserved.
4. Brie! facts of the case arc that on 01.07.2019 at around 3:00PM vehicle number 1)B1 I AX-7621 was intercepted for checking by Assistant Commissioner State Taxes & Excise Flying Squad Baddi, BBN, Distt. Solan (HP) along with his team. During the course of checking the person incharge of the vehicle produced tax invoice bearing number 91072637 dated 26.06.2019 issued by M/s Hero Steel Pvt. Ltd. Ludhiana having GSTIN Number 03AACCH46381.1ZK. The goods being transported were C.R. sheets (USN Code 7211) weighing 31850 Kgs amounting Rs. 16,24,350/- (excluding GST amount) was being consigned to M/s Shree Balaji Enterprises, Vill-Latha, Baddi having GsTIN number 02ABPFS7709E1Z3.
5. While going through the documents produced by the person in-charge of the vehicle the checking team after verifying the e-way bill on the official site of the e-way bill portal found that the e-way bill bearing number 361124090042 had expired on 28.06.2019. Thereafter, the vehicle along with the goods was detained on the grounds of violation of rule 138 of HPGST/CGST read with section 20 of IGST Act 2017. Proceedings u/s 129 was initiated and detention order in Form MOV-06 issued to the person incharge to the vehicle.
6. Subsequently, notice under section 20 of IGST Act read with section 129 of 11PCIST/CGST Act was issued to the supplier and recipient of the goods through the person in-charge of the conveyance directing them to appear on or before 01.07.2019 at 3:00PM to explain as to why penalty under the above stated sections should not be imposed on it far its failure to comply with the provisions of rule 138 of HPGST/CGST rules 2017. An amount of Rs. 5.84,766/- as tax and penalty was imposed on the Appellant under section 129 of HPGST/CGST Act 2017 read with section 20 of IGST Act 2017. The vehicle along with the goods was released on 03.07.2019 after the Appellant had deposited an amount of Rs. 5,84,766/- vide CPIN 19070300005346.
7. Feeling aggrieved by the orders of the Proper Officer the Appellant has preferred an appeal in this court which was acknowledged vide number 061/2019 dated 03.10.2019.
8. Grounds of Appeal of the Appellant:-
i) That the proper officer has erred in imposing tax of Rs. 2,92,383/- under section 20 of IGST Act 2017 and also imposing a penalty of Rs. 2,92.383/- under section 20 of IGST Act, 2017 read with Section 129 of CGST/HPGST Act 2017. Tax and penalty has been imposed without issue of any proper notice and also without grant of any opportunity of being heard. Granting opportunity of being heard is not mere empty formality but it is the fundamental principles of natural justice to provide effective opportunity of being heard before any penalty is imposed. The goods and vehicle are alleged to have been intercepted at 3PM on 01.07.20198 whereas the notice has also been alleged to have been issued to the consignor and consignee of goods through driver with the directions to appear before him on or before 01.07.2019 at 3PM and to show cause as to why penalty and tax may not be imposed for failure to comply with the provisions of Rule 138 of CGST Rules. 2017. It amounts to denial of any opportunity and any action taken on the basis of said notice is illegal and unsustainable.
a. The inspecting officer has also erred in imposing tax and penalty U/s 129 of the CGST Act/HPGST Act read with section 20 of IGST Act, 2017 which is against the fundamental rules of natural justice as inspecting of officer cannot himself be the deciding authority.
b. That the impugned order passed by the officer is most arbitrary and illegal. The penalty has been imposed and tax has been levied without following the due procedure as contemplated under Section 20 of the IGST Act 2017 read with section 129 of CGST/HPGST Acts 2017 and also read with the instructions contained issued by Central Board of Indirect Taxes and Customs contained in Circular No. 41/18/2018 GST where the due procedure regarding interception of conveyance for inspection of goods in movement, detention, release, penalty etc. has been laid down. The proper officer has not uploaded the physical verification report on Form GST MOV-04 and also unloaded the MOV-09 on the common portal as required and also did not provide proper opportunity of being heard. The inspecting officer also failed to unloaded Part-A of the Form GST EWB-03 and final report in Part-B of Form GST EWB-03.
c. That the impugned order passed by the proper is unsustainable as it is against law as well as against the true facts of the case. The proper officer has repeatedly observed in its order that validly of e-way bill has explained on 28.06.2019 and thus goods were under movement against invalid e-way bill. The proper officer has utterly failed to verify the validity of e-way bill which was extended up to 30.06.2019.
d. That penalty order is further illegal and against the fundamental principles of law. It is against the law laid down by the apex court of the country as laid down in the case of HINDUSTAN STEEL I .’ID. VS. The STATE OF ORISSA (25 STC 211), where it has been held as under.
a. An order imposing penalty for failure to carry out a statutory obligation if the result of a quasi-judicial proceedings. and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not be imposed merely because it is lawful to do so. Whether penalty should be imposed Jar failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of (ill the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is A technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute.
ii) That ratio of the aforesaid culling fully apply to the facts and circumstances of the present case, as there has not been any deliberate or dishonest intention on the part of the appellant to evade or avoid any tax. In the given circumstances of the case no tax can be inferred to have been attempted to be evaded. Penalty is thus unsustainable.
iii) That the officer imposing the tax and penalty has also erred in determining the tax liability payable under the IGST Act 2017 at Rs. 2017 at Rs. 2.92,383 as well as penalty leviable U/s 20 of the IGST Act 2017 read with section 129 of the CGST/HPGST Act 2017 at Rs. 2.92,383/- i.e. total additional demand of Rs. 5,84,766/-. It is pertinent here to explain that appellant had already paid IGST amounting to Rs. 2,92.383/- on the said transaction. It amount to double payment of IGST.
iv) That the proper officer has imposed the penalty and tax under IGST Act 2017 on the basis and its findings as recorded in its order as per the produced e-way bill. its validity had expired on 12.05.2019″ which is absolutely wrong and baseless. Thus the penalty based on such finding is unsustainable.
v) That the penalty imposed also cannot be sustained for the reason that the conveyance and goods reached the destination of the its PIN code i.e. factory premises in time i.e. 30thjune 2019 which was Sunday and factory was closed, and goods could not be unloaded. The security Guard of the factory on duty asked the driver to come next day for unloading of goods. Before the goods could be unloaded the team of state GST official intercepted the goods and conveyance and imposed the penalty on baseless and unlawful grounds.
9. In their written reply the Respondents have submitted that the Appellant has violated the provisions of sub section (3) of section 68 and rule 138 of HPGST/CGST Rule 2017. Since the e-way bill was found expired at the time of inspection of the vehicle tax and Respondent has further quoted the judgement of Hon’ble Allahabad Iligh Court in the matter of Timeexo Fasteners India (Pvt). Ltd. Vs State of UP which is not applicable in the instant case as the facts are entirely different in both the cases.
10. I have gone through the documents on record and the written submissions made by both the parties. The case was listed on 23.07.2022 for hearing on which date Sh. Somnath Ld. Advocate and Sh. Balwant Singh. Accounts Manager, were present on behalf of the Appellant and Sh. Abhishek Chauhan, ASTEO, was present on behalf of the Respondent.
11. The I.d. Advocate submitted that the e-way bill number 361124090042 was generated on 26.06.2019 whose validity was upto 28.06.2019. Thereafter, the same e-way bill was revalidated on 28.06.2019 at 4:34PM and again extended on 29.06.2019 at 6:32PM with validity upto the midnight of 30.06.2019. He further submitted that the Proper Officer never bothered to check the validity of the e-way bill from the e-way bill portal. Part-B of the c-way bill clearly illustrates that the said e-way bill was generated on 26.06.2019 at 9:09PM then extended on 28.06.2019 at 4:34PM and further extended on 29.06.2019 at 6:32PM which was valid upto the midnight of 30.06.2019. The Ld. Advocate has also furnished in his grounds of appeal photocopy of Toll Receipt of Dherowal Barrier vide which the stud vehicle entered into the state of I IP on 30.06.2019 at 12:03AM. He has further contended that the Proper Officer neither uploaded the physical verification report penalty has been rightly imposed under section 129 by the Proper Officer. The in Form GST MOV-04 nor uploaded MOV-09 on the common portal. The Proper Officer did not provide proper opportunity of being heard. The inspecting officer also failed to upload Part-A of the Form GST EWB-03 and final report in Part-B of Form GST EWB03. It has been stated in the grounds of appeal that the Proper Officer has made wrong findings in his order, wherein, it is mentioned that the validity of the e-way bill had expired on 12.05.2019. The Ld. Advocate has submitted that the vehicle had reached its destination on 30.06.2019 well before the expiry of the e-way bill. On 30.06.2019 being Sunday the vehicle could not be unloaded. The Ld. Advocate has emphatically put across the point that no opportunity of being heard was afforded to the Appellant before the imposition of tax and penalty. So much so the notice was issued by the Proper Officer directing the supplier and recipient to appear on or before 01.07.2019 at 3:00PM as to explain their stand which is the same date and time of interception of vehicle by the Proper Officer.
12. The Respondent in their written and oral submissions has stated that the Appellant had violated the provisions of section 68 read with rule 138 as the e-way bill was found expired at the time of inspection of the vehicle and the tax and penalty has been rightly imposed under section 129.
13. In order to resolve the issue. it is necessary to understand the relevant provisions of GST Acts and Rules which govern the inspection of goods in movement, detention, seizure and release of goods and conveyances in transit.
14. Section 68 of HPGST/CGST Act 2017. which, deals with the inspection of goods in movement, is reproduced as below:‑
1) The Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may he prescribed.
2) The details of documents required to he carried under sub-section (I) shall be validated in such manner as may be prescribed.
3) Where any conveyance referred to in sub-section (1) is intercepted by the proper officer at am place. he may require the person in charge of the said conveyance to produce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allows the inspection of goods.
15 Section 129 which deals with the detention, seizure and release of goods and conveyances in transit is reproduced below:-
(1) Notwithstanding anything contained in this Act. where any person transports any goods or stores ant’ goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder. all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released.-
on payment of the applicable tax and penalty equal to one hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes .forward for payment of such tax and penalty;
on payment (b)fate applicable lax and penalty equal to the fifty per cent. of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come. forward for payment of such tax and penalty:
upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed.-
Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.
(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply fin-detention and seizure Qt. goods and conveyances.
(3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order .far payment of tax and penalty under clause (a) or clause (b) or clause (c).
(4) No tax, interest or penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard.
(5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded.
(6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (I) within seven days of such detention or seizure, .further proceedings shall he initiated in accordance with the provisions of section 130:
Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time. the said period of seven days may he reduced by the proper officer.
16. Rule 138 of HPGS/CGST Act 2017, which, deals with the information to be furnished prior to commencement of movement of goods and generation of E-Way Bill. Rule 138(1) lays down that: – Every registered person who causes movement of goods of consignment value exceeding filly thousand rupees‑
(i) in relation to supply : or
(ii) for reasons other than supply: or
(iii) due to inward supply from an unregistered person, shall, before commencement of such movement, furnish information relating to the said goods in Part A of RORM GST EWB-01. electronically, on the common portal.
(2) Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or by railways or by air or by vessel, the said person or the recipient may generate the e-way bill in FORM GST EWB-01 electronically on the common portal after furnishing information in Part B of FORM GST EWB-01.
17. Rule 138A deals with the documents and devices to be carried by a person in-charge of the conveyance(1) The person in-charge of the conveyance shall carry ‑
(a) the invoice or bill of supply or delivery Challan, as the case may be and (b) a copy of E-Way or the Li-Way bill No., either physically or mapped to a RFID embedded on to the conveyance in such manner as may be notified by the commissioner.
18. Besides the above provisions of Act and Rule attention is also invited to the circular no. 64/38/2018-GST issued by Central Board of Indirect Taxes and Customs regarding the procedure for interception of conveyances for inspection of goods in movement and detention. release and confiscation of such goods and conveyances. The above stated circular is reproduced as under:‑
Circular No. 64138/201S-GST
Page 1 of 3 CBEC/20/16/03/2017-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing —
New Delhi, Dated the 14th
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All) / The Principal Directors General / Directors General (All)
Subject: Modification of the procedure for interception of conveyances for inspection of goods in movement, and detention, release and confiscation of such goods and conveyances. as clarified in Circular Nos. 41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018 –regarding
Kind attention is invited to Circular No. 41/15/2018-GST dated 13th April, 2018 as amended by Circular No. 49/23/2018-GST dated 21st June, 2018 vide which the procedure for interception of conveyances* inspection of goods in movement. and detention, release and confiscation of such goods and conveyances was specified.
2. Various representations have been received regarding imposition of penalty in case of minor discrepancies in the details mentioned in the e-way bill although there are no major lapses in the invoices accompanying the goods in movement. The matter has been examined. In order to clarib’ this issue and to ensure uniformity in the implementation of the provisions of the law ULTOSS the field formations, the Board, in exercise of its powers conferred under section 168 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act) hereby clarifies’ the said issue hereunder.
3. Section 68 of the CGST Act read with rule 138A of the Central Goods and Services Tax Rules,2017 (hereinafter referred to as ‘the (UST Rules’) requires that the person in charge of a circular No. 64/38/2018-GST Page 2 of 3 conveyance carrying any consignment of goods of value exceeding Rs 50,000/- should carry a copy of documents viz., invoice/bill of supply delivery challan/bill of entry and a valid e-way bill in physical or electronic form for verification. In case such person does not carry the mentioned documents, there is no doubt that a contravention of the provisions of the law takes place and the provisions of section 129 and section 130 of the CGST Act are invocable. Further, it may be noted that the non furnishing of information in Part B of FORM GST EWB-01 amounts to the e-way bill becoming not a valid document for the movement of goods by road as per Explanation (2) to rule 138(3) of the CGST Rules, except in the case where the goods are transported for a distance of upto fifty kilometres within the State or Union territory to or from the place of business of the transporter to the place of business of the consignor or the consignee. as the case may he.
4. Whereas, section 129 of the CGST Act provides for detention and seizure of goods and conveyances and their release on the payment of requisite tax and penalty in cases where such goods are transported in contravention of the provisions of the CGST Act or the rules made thereunder. It has been ‘Warmed that preceding under section 129 of the CGST Act are being initiated for even. mistake in the documents mentioned in para 3 above. It is clarified that in case a consignment of goods is accompanied by an invoice or any other specified document and not an e-way bill, proceedings under section 129 of the CGST Act may be initiated.
5. Further, in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under section 129 of the CGST Act may not he initiated. inter cilia, in the following situations:
a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, wherever applicable, is correct:
h) Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill:
c) Error in the address of the consignee to the extent that the locality and other details of the consignee are correct:
d) Error in one or two digits of the document number mentioned in the e-way bill; circular No. 64/38/2018-GST Page 3 of 3 e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct; f) Error in one or two digits/characters of the vehicle number.
6. In case of the above situations, penalty to the tune of Rs. 500/- each under section 125 of the CGST Act and the respective State GST Act should be imposed (Rs.1000/- under the 1GST Act) in FORM (ST ORC-07 fur every consignment. A record of all such consignments where proceedings under section 129 of the CGST Act have not been invoked in view of the situations listed in paragraph 5 above shall be sent by the proper officer to his controlling officer on a weekly basis.
7. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would Meow, (Upender Gupta) Commissioner (GST)
19. Thus, from the above it is clear that the person in-charge of the conveyance carrying any consignment of goods of value exceeding Rs.50,000/- should carry a copy of documents v.i.z invoice/bill of supply/delivery challan/bill of entry and a valid e-way bill in physical ü r electronic form for verification. Non furnishing of information in Part-B of form GST EWB-01 amounts to the e-way bill becoming not a valid document for the movement of goods by road as per Explanation(2) to rule 138(3) of IIPGST/CGST Rules, except in the case where the goods are transported for a distance of fifty KM within the state or Union Territory to or from the place of business of the transporter to the place of business of the consigner or the consignee. as the case may be.
20. Further, as stated in para number 5 of the circular dated 14.09,2018 mentioned at para number 15 supra in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill. proceedings under section 129 of the CGST \ct may not be initiated,-inter alia. in the situations already mentioned in para number 15 above. It is further clarified in the circular that in case a consignment of goods is accompanied by an invoice or any other specified documents and not by an e-way bill, proceedings under section 129 of CGST Act may be initiated. In the instant case the e-way bill was available at the time of interception of vehicle, though found expired by the checking team on 01/07/2019.
21. While going through the orders of the Proper Officer it is mentioned that the “goods were examined physically and were found matching with the detail mentioned in lax invoices.” It is further stated in the orders that the c-way bill No. 361124090042 was verified from the official site of the e-way bill portal and the same was found expired on 28/06/2019 and subsequently proceedings under section 129 were initiated and an amount of Rs. 5.84.766/- as tax and penaltn was imposed under section 129 of HP GST/ CGST Act read with section 20 of IGST Act, 2017 for violations of the provisions of section 68 read with rule 138 of Acts ibid.
22. Surprisingly, as per the orders of the proper officer notice under section 20 of IGST Act read with section 129 of the HP GST Act was issued on 01/07/2019 directing both the supplier and the recipient to appear on or before 01/07/2019 at 3.00 PM to explain as to why penalty under the above stated sections should not be imposed. It is further mentioned in the order that the validity of the e-way bill had expired on 12/05/2019, whereas. the vehicle was detected on 01/07/2019.
23. It appears from the above that Proper Officer had passed the order without application of mind. The very fact that he is issuing notice on 01/07/2019 to appear on or before 01/07/2019 at 3.00PM i.e. the date on which the vehicle was intercepted and showing the date of validity of e-way bill as 12/05/2019 shows the carelessness, callousness and insensitivity while passing the orders.
24. Moreover in the impugned order there is not even a whisper nor in the body of the order which shows that the Appellant was liable to payment of tax and penalty despite the fact that 1GST had already been paid on the transaction under question. The order is totally bereft of any reasoning. The Appellant has claimed that no proper opportunity to he heard was given to him as the notice issued by the Proper Officer to appear before him was on the same date and time, when the vehicle was intercepted. The Proper Officer has failed to make out a case that there was a willful and deliberate attempt by the Appellant to evade the tax before imposing the penalty and tax.
25. The Proper Officer has failed to appreciate the fact that the objective of section 129 is to ensure that there is no evasion of tax through unaccounted movement of goods. In the instant case, the consignment was supported by tax invoice and OR which has not been disputed in the orders. As per tax invoice IGST @ 18% has been charged separately and the details in OR matches with the tax invoice. The nature and quantity of goods loaded in the vehicle is also not disputed. So far the penalty for an amount equivalent to tax is concerned those are the incidents when the tax is sought to be evaded or not deducted under section 51 etc.
26. It is a matter of record that the vehicle was checked on 01/07/2019 at 3.00PM. At the time of interception of vehicle the e-way bill produced by the person incharge of the vehicle was found expired. As per the e-way hill on record the validity of the e-way bill was extended on 29/06/2019 with validity upto 30/06/2019. There is no mention of date 30/06/2019 in the orders of the Proper Officer. which as per him the validity had expired on 28/06/2019 which shows that the Proper Officer never verified the contents of the e-way bill on the portal.
27. It is equally necessary to mention here that the toll receipt issued at Dherowal Barrier on 30/06/2019 at 12.03 AM shows that the validity of the e-way bill was upto the midnight of 30/06/2019. It has been claimed by the Appellant that the vehicle was checked near the factory premises, whereas, as per the order of the Proper Officer the vehicle was checked at Judi, Baddi in transit on 01/07/2019. During the hearing on 23/07/2022 Ld. Advocate stated that at the time of checking the vehicle was parked near the factory premises. The departmental representative stated that since the validity of e-way bill had expired on 28/06/2019 i.e. why the vehicle was detained. He could not specifically answer whether the vehicle was checked during transit or near the factory premises.
28 As per sub-rule (9) of Rule 138 where an e-way hill has been generated under this rule, the goods are either nor transported or are nor-transported as per the detail furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, within 24-hours of generation of the e-way bill;
Provided that an e-way hill cannot be canceled if it has been verified in transit in accordance with the provisions of rule 13813. In the instant case the validity of the e-way bill has been extended as per the above rule.
29. It is stated in the order of the Proper Officer that the goods were physically examined and were found matching with the detail mentioned in the tax invoice. The goods were accompanied with proper tax invoice and OR. The Proper Officer has not mentioned anything regarding the evasion of tax by the Appellant. The vehicle was detained only for the reason that at the time of checking the e-way bill was there but the same was found beyond its validity period.
30. It is seen from the above facts that before the commencement of movement of goods the supplier had raised the tax invoice. The e-way bill was also generated prior the commencement of movement which contained the details of goods, tax invoice, as well as the buyer of the goods including his registration number under the GST Act. Once the tax invoice is issued and the e-way bill generated through online GST Portal containing all details regarding the goods the information of such transaction is available with GST authorities also, therefore, the possibility of tax evasion is very remote.
31. It is pertinent to discuss the Judgement of the Hon’ble Supreme Court in the matter of M/s Satyam Shivam Papers Pvt. Ltd. Vs. Asst. Commissioner (ST) and 4 others on 12 January 2022 relevant part reproduced as under‑
-The consideration of the High Court in the order impugned and the material placed on record leaved nothing to doubt that the attempted inference the part of petitioner No.2. that the writ petitioner was evading lax because the e-way hill had expired a day earlier, had not only been baseless but even the intent behind the proceedings against the writ petitioner was also questionable. particularly when it was find that the goods in question, after being detained were, strangely, kept in the house of a relative of the petitioner No.2 for 16 days and not at any other designated place for their safe custody.
The High courts has, inter alia, found that:
“41 …It was the duty of 2″d respondent to consider the explanation offered by petitioner as to why the goods could not have been delivered during the validity of the e-way bill. and instead he is harping on the •fact that the e-way bill is not extended even four (04) hours, before the expiry or lino. (04) hours after the expiry. which is untenable.
The 2″d respondent merely states in the counter affidavit that there is clear evasion of tax and so he did not consider the said explanations.
This is plainly arbitrary and illegal and violates Article 14 of the constitution of India. because there is no denial by the 2″‘ respondent of the traffic blockage at Basher Bagh due to the anti CAA and NRC agitation on 04.01,2020up to 8.30pm preventing the movement of auto trolley for otherwise the goods would have been delivered 04.01.2020 was a Saturday. 05.01.2020 was a Sunday. and the next working day was only 06.01.2020.”
The High Court has further found and. in our view, rightly so thus:
42. How the 2″d respondent could have drawn an inference that petitioner is evading tax merely .,, because the hill has expired, is also nowhere explained in the counter- affidavit.
In our considered opinion, there was no material before the 2″d respondent to come to the conclusion that there was evasion of tax by the petitioner merely on account of lapsing of time mentioned in the e-way bill because even the 2″d respondent does not say that there was any evidence of attempt to sell the goods to somebody else on 06.01.2020. On account of non0extension of the validity of the e-way bill by petitioner or the auto trolley driver, no presumption can he drawn that there was an intention to evade tax.”
Therefore it is clear from the above judgment that tax/penalty under section 129 of CGST/IIPGST Act 2017 cannot be imposed merely on the basis of Expiry of E —Way bill and without proving the intention to evade the tax.
32. For the foregoing reasons. the Appeal is allowed and the impugned order passed by the Proper Officer arc quashed and set aside. However, a penalty of Rs. 15,000/- (Rupees fifteen thousand only) is imposed under section 125 of HPGST/CGST Act on the Appellant. Respondent is directed to recover the amount of penalty and refund the balance to the Appellant as per law.
The Appeal is disposed off in above manner and the Parties be informed accordingly.