E-Way Bill – GST Authority Vs Judiciary

The article contains judgements relating to the matter of e-way bills. This article shall be helpful to the readers in the sense that they would be come to know the irregularities being adopted by the authorities while passing detention orders. I request to publish it in your august site.

This article contains an analysis on detention orders passed by the GST Authority after inspection the goods in transit. Such orders which have either been set aside or remanded back by the Judiciary, are provided herein. Even some cases the Judiciary imposed cost on the GST Authority due to gross negligence found while handling the case by the GST Authority.

GIST OF GST LAW ON INSPECTION OF GOODS IN TRANSIT

• Section 68 of the CGST Act read with rule 138 of the CGST require to generate a e-way bill before commencement of movement of the goods. The prescribed limit to issue a e-way bill in the case of interstate transaction is if the consignment value of goods is exceeding fifty thousand. The limit to issue a e-way bill if movement of goods within the state or union territory is varying. It may be the amount as notified by the respective state.
• Sub-rule 1 of rule 138A of the CGST Rules requires the person in charge of a conveyance shall carry the invoice or bill of supply or delivery challan, as the case may be; and a copy of the e-way bill in physical form or the e-way bill number in electronic form ………………
• The e-way bill shall be valid e-way bill if it is completed in all respects including Part-B of such bill. If any column or any part of E-Way Bill is incomplete or unfilled in then such e-way bill shall be treated as invalid e-way bill.
• If the Officer finds any contravention in this regard, he shall initiate proceedings under section 129 of the CGST Act. 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 as per rule 129(1) of the CGST Rules.
• Quantum of penalty as per section 129(1)(a) CGST is two hundred per cent on the tax payable on such goods …………….. where the owner of the goods comes forward for payment of such penalty.
• Quantum of penalty as per section 129(1)(b) CGST is fifty per cent of the value of the goods or two hundred per cent of the tax payable on such goods, whichever is higher …………….. where the owner of the goods does not come forward for payment of such penalty.

E-Way Bill Proceedings not to be initiated in following situations

– Circular No. 64/38/2018-GST dated 14-09-2018

a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, wherever applicable, is correct;

b) 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;

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.

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 IGST Act) in FORM GST DRC-07 for every consignment.  

Judicial Pronouncements in regard to E-Way Bill Matter

The various Hon’ble High Courts have set aside the orders and quashed the penalty in cases where it was found the case of – clerical mistakes, the matter was not within the jurisdiction of the officer, order was passed without application of mind, no case of evasion of tax and order was passed beyond the principle of nature justice etc…

A list of cases on which judgements are available, is stated below.

> The Case of Clerical Error

> The Case of Classification Mismatch

> The Case of Principle of Natural Justice

> The case of Non-Speaking Order/Non Application of Mind

> The case of reuse of E-Way Bill. Transportation commenced after preparation of e-way bills

> E-Way bill was not amended during trans-shipment

> The Case of Multiple Invoices for a same consignment

> The Case of operational convenience of the Transporter

> The Case of Goods taken back due to undelivered

> The E-Way Bill corrected by generating fresh e-way bill

> Writ Petition allowed with cost on the GST Department

> No Case of Evasion of Tax

> Documents furnished at physical verification stage

> E-Bill expired in transit

> Goods reached in time at destination but unloaded after expiry of the e-way bill

> Valuation of goods not the ground for detention of goods

> Part B of the E-Way Bill not filled in

> The Case of Clerical Error –

M/s AGARWAL INDUSTRIES PVT LTD – ANDHRA PRADESH HIGH COURT

There is error in one digit in the invoice number in the E-Way Bill. When there is an error in one or two digits of the document number mentioned in the e-way bill, the Respondents made an error in collecting the tax and penalty from the petitioner – the Respondents are directed to refund the tax and penalty to the petitioner – the writ petition is allowed.

TIRTHAMOYEE ALUMINIUM PRODUCTS – TRIPURA HIGH COURT

Due to a clerical error in the e-way Bill the distance from the place of origin to the destination was shown as 470 Kms. instead of actual distance of 1470 Kms.

There is no dispute that the goods were sold by way of inter-state sale and on such basis, applicable tax was paid – CBIC vide circular dated 14th September, 2018 clarify the manner in which such clerical errors would be dealt with – in the present case, the respondent had no power to demand GST with penalty – it is not a fit as case where the petitioner is to be relegated to appeal remedy, when the order passed by the Inspector of State Tax suffered from gross irregularity of no hearing been granted to the petitioner and order confirming the demand of tax with penalty was passed on the date of issue of notice of personal hearing – the impugned order is set aside and petition is allowed.

ROBBINS TUNNELLING AND TRENCHLESS TECHNOLOGY (INDIA) PVT LTD – MADYA PRADESH HIGH COURT

Wrong mention of consignee name – Minor discrepancies – Import of machinery – the clearing and forwarding agent made mistake by generating the E-way bill in its own name instead of the petitioner.

The error committed at the time of generation of the E-way bill was a procedural mistake without a fraudulent intention or gross negligence – the respondents are not justified in rejecting the appeal of the petitioner on the ground that the mistake committed while generating the E-way bill, was not a clerical error or a small mistake – the impugned orders confirming the tax and penalty are quashed – The respondents are directed to consider the case of the petitioner for imposition of a minor penalty, treating it to be a clerical mistake, as per Board Circular dated 14-9-2018 No. CBEC/20/16/03/2017-GST – the writ petition is allowed.

DHABRIYA POLYWOOD LIMITED Vs UNION OF INDIA – HIGH COURT OF GUJRAT

The petitioner’s case was that there was discrepancy in the E-way bill with regard to ‘wrong vehicle type’. Though all documents such as invoice and e-way bill were available when the goods were detained.

The Hon’ble High Court quashed and set-aside the notice. Accordingly, order of detention of goods was quashed and directed to release the goods at earliest.

The Court held that the case of the petitioner was covered under Circular Nos.41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018. The circular makes it clear that in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, the proceedings under Section 129 of the CGST Act may not be ordinarily initiated, more particularly, in the situation, as highlighted in para 5 of the circular.

M/s CREATE CONSULTS – HIGH COURT OF MADHYA PRADESH

The case of the petitioner say A is that A placed order to Mumbai Supplier B for supply of goods to his buyer C in Gujrat. Inadvertently in e-way bill consignor name was typed A (i.e. petitioner’s name) in place of B who was the actual supplier of goods. There was no any mistake found in other documents such as tax invoice, courier receipt, vehicle number etc.. The goods were detained and proceedings initiated on the ground that supplier name was not correctly mentioned in the e-way bill issued.

The Hon’ble Court passed the order in favour of the petitioner. The court held that the mistake appears to be bonafide inasmuch as the detail of vehicle, dispatch date is same. In our considered view, the case in hand appears to be a case where e-way bill was generated wrongly in the name of petitioner on account of some clerical or typographical error. It is further directed that respondents will be at liberty to consider the case of petitioner for imposition of a minor penalty while treating the mistake in question to be a clerical mistake as per circular dated 14/09/2018 bearing no. CBEC/20/16/03/2017-GST issued by Ministry of Finance, Government of India.

M/S L G ELECTRONICS INDIA LTD; – APPELLATE AUTHORITY PUNCHKULLA HARYANA

In the present case the shipping address was mentioned of principal place of business Gurgaon in place of branch office Rewari Haryana for which goods were transported. Shipping address was correctly incorporated in Tax Invoice and Goods Receipt. Mistake was happened due to the E-Way bill system shows shipping address as principal place of business by default which was not changed inadvertently. Total Tax and Penalty of Rs.255154.00 were imposed.

The Appellate Authority held in favour of the petitioner by giving following grounds in the judgement.

It is obvious from the facts of the case that the officer concerned has imposed the tax and penalty under section 129 of the HGST and CGST merely on the minor clerical error and on the presumption basis that there would be evasion of tax which cannot take place of facts, once it has been verified that the goods were duly accompanied with proper tax invoice/GR and E-Way Bill.

The order was set aside and appeal is accepted with a penalty imposed of Rs.5000.00 each under both Acts.

M/s SONAL AUTOMATION INDUSTRIES Vs – HIGH COURT OF UTTRAKHAND

The penalty order was passed due to inadvertent mistake i.e. invoice number stated as 235 in place of SAI/V/235.

The writ petition was allowed and penalty order was quashed.

The imposition of the penal consequences due to an exception, which has been caused on account of the inadvertent human error by not referring the invoice number as “SAI/V-235” and by referring it to “235” only. Since even the invoice number “235” has been consistently maintained in all the documentations, which were made by the petitioner, since it never cleverly intended to evade the tax, or revenue of the State, the exception would fall to be within Clause 5 of the Circular dated 14th September, 2018.

Thus, the imposition made on account of the said human error, which has crept in invoice number is pardonable under Clause 5 of the Circular dated 14.09.2018.

> The Case of Classification Mismatch –

M/s HINDUSTAN COCA COLA PRIVATE LIMITED – KERALA HIGH COURT

It is irresistibly concluded that in case of a bonafide dispute with regard to the classification between a transitor of the goods and the squad officer, the squad officer may intercept the goods and detain them for the purpose of preparing the relevant papers for effective transmission to the judicial assessing officers and nothing beyond. In the present case, it is a case of bonafide miscalculation as to whether the goods would be exigible to 12% or 28%.

M/s PODARAN FOODS INDIA PRIVATE LIMITED – ERAKULAM HIGH COURT

Mere suspicion of mis-classification of goods cannot be the basis for a detention under Section 129 of the CGST Act – Section 129 forms part of the machinery provisions under the Act to check evasion of tax and a detention can be justified only if there is a contravention of the provisions of the Act in relation to transportation of goods or their storage while in transit – the alleged misclassification cannot form the basis of a detention under Section 129 of the GST Act – the impugned detention orders and notices are quashed – the writ petitions are allowed.

M/s RAGHAV METALS Vs STATE OF HARYANA AND OTHERS – HIGH COURT OF PUNJAB AND HARYANA

On physical verification discrepancy was found in the actual quantity. Actual quantity was found to be 90 kgs.700 gms more than what has been found as per Invoice. Thus, by showing lesser quantity the petitioner intended to evade tax.

The Court observed that it cannot be said that the petitioner had any intent to evade the tax or the mismatch in the quantities is of such nature which shall entail proceedings under Section 129 of the Act. A person, who has already paid a tax of Rs.1276717.68 on a consignment cannot be said to have an intent to evade tax amounting to Rs.11000/-.

The fact that the mismatch cannot be termed as contravention of the provisions of the Act.

> The Case of Principle of Natural Justice

M/s RIMI SALES AGENCY – TRIPURA HIGH COURT

The show-cause notice was issued on 06.11.2018 which required the petitioner to appear before the said authority on 23.11.2018. Without permitting the petitioner to appear and file reply and oppose the demands the authority confirmed the demand by passing separate orders on 06.11.2018. This was wholly impermissible – the order passed by the authority suffers from grossest possible violation of principles of natural justice – the demand orders are quashed and set aside and writ petition is allowed.

M/s TANAY CREATION THROUGH PROP. TANAY MAHAVIR SHAH – HIGH COURT OF GUJRAT

The petitioner put the case before the Hon’ble Court that no opportunity was given before passing the order under section 129 and 130. The notices were served upon the truck driver instead of owner of the goods or owner of the conveyance. The case was held in favour of the petitioner on following grounds.

In the instant case, what is to be noticed glaringly is a complete absence of any notice and gross violation of principles of natural justice. The petitioner, who is the owner of the goods has not been afforded the opportunity at all as no service of show cause notice is also made to the petitioner and the opportunity was only afforded to the driver. Notice was also issued under the provisions of sub-section(3) of section 130 of the GST Act. This also is neither to the petitioner nor to any other person, but exclusively to the driver who has been termed as person in charge of the conveyance. The tax invoice contained full address and the contact details. Therefore, not only there has been no service of any show cause notice prior to the passing of an order under Form GST MOV-10 or Form GST MOV 11, but also no opportunity of hearing was made available to the petitioner. That itself is a ground for this Court to entertain this petition. The order impugned is in the complete breach of the principles of natural justice for not having issued the show cause notice in the first place and not even having afforded any opportunity of hearing to the petitioner. Quashment of the order will sub-serve the purpose and hence the impugned order passed by the competent authority dated 15.09.2021 will need to be quashed and set aside.

> The case of Non Speaking Order/Non Application of Mind

TARMAL INDUSTRIAL SUPPLY COMPANY – MADRAS HIGH COURT

Non-speaking order – the show cause notice issued prior to passing of the impugned order does not stipulate even basic details such as the date and time of hearing – the requirement of passing a speaking order has been entirely frustrated in so far as in the field marked ‘speaking order’, there are no reasons set out for the conclusion arrived at by the authority. Manifest non application of mind is evident – Not just the order but even the notices leading to the passing of the impugned order, are rife with errors – in view of prima facie discrepancy in documentation, liberty granted to the respondent to issue notice afresh, hear the petitioner and pass a speaking order in regard to the levy of penalty – the present writ petition is allowed.

> The case of reuse of E-Way Bill. Transportation commenced after preparation of e-way bills

M/s ANANDESHWAR TRADERS – ALLAHBAD HIGH COURT

The goods were not being transported immediately upon preparation of the e-way bills on 24.11.2019, the same should have been cancelled. Since the e-way bills were not cancelled and the transportation of the goods commenced four days thereafter, it has been inferred that the said e-way bills had been reused.

Even if the dealer does not cancel the e-way bill within 24 hours of its generation, it would remain a matter of inquiry to determine on evidence whether an actual transaction had taken place or not. That would be subject to evidence received by the authority. As such it was open to the seizing authority to make all fact inquiries and ascertain on that basis whether the goods had or had not been transported pursuant to the e-way bills generated on 24.11.2019.

Since the petitioner-assessee had pleaded a negative fact, the initial onus was on the assessing authority to lead positive evidence to establish that the goods had been transported on an earlier occasion. Neither any inquiry appears to have been made at that stage from the purchasing dealer or any toll plaza or other source, nor the petitioner was confronted with any adverse material as may have shifted the onus on the assessee to establish non-transportation of goods on an earlier occasion.

The presumption could not be drawn on the basis of the existence of the e-way bills though there did not exist evidence of actual transaction performed and though there is no statutory presumption available. Also, there is no finding of the assessing authority to that effect only. Mere assertion made at the end of the seizure order that it was clearly established that the assessee had made double use of the e-way bills is merely a conclusion drawn bereft of material on record. It is the reason based on facts and evidence found by the assessing authority that has to be examined to test the correctness of the order and not the conclusions, recorded without any material on record.

In view of the above, no useful purpose would be served to remand the proceeding now as that would amount to giving the revenue a second inning to built a fresh case that too after being aware of the defense set out by the assessee in the first leg of the proceedings. The order dated 3.12.2019 passed by the proper authority under Section 129(3) of the Act is found to be perverse and is set aside. Any amount that may have been deposited by the petitioner assessee, may be returned to it, in accordance with law.

> E-Way bill was not amended during trans-shipment.

M/s SRI GOPIKRISHNA INFRASTRUCTURE PVT LTD – Tripura High Court

The transporter had shifted the goods in another vehicle but was unable to amend the e-way bill through the designated portal. But the goods in transit were matching with the following facts: invoice number and date, the goods as per invoice and as per e-way bill dated 21.2.2020 and details of Consignee and Consigner – It has been admitted by the petitioner that the omission is attributable on their part for not generating the e-way bill despite their diligent efforts to generate a new e-way bill against the vehicle which was carrying the consignment

The petitioner has committed gross negligence by not upgrading or amending the e-way bill when the regular e-way bill had expired in transit – the breach definitely falls within the ambit of Section 122(xiv) of the CGST Act and as such the petitioner is liable to penalty – however, for the breach which falls under Section 122(xiv), the penalty is Rs.10,000/- only– the Respondent has exceeded his jurisdiction while imposing the penalty for an amount equivalent to tax – the order of penalty is set aside and the petitioner is directed to pay the sum of Rs. 10,000/- as penalty for the breach which is covered under Section 122(xiv) of the CGST Act – the writ petition is partly allowed.

> The Case of Multiple Invoices for a same consignment

BON CARGOS PRIVATE LIMITED – Kerala High Court

When goods of the same consignor covered by different invoices are consigned together in one vehicle; the value will be the total of that in the multiple invoices – the detention in question is not without jurisdiction.

When goods of the same consignment covered by multiple invoices exceed the limit of Rs.50,000/-, necessarily there should be generation of e-way bill. Otherwise, the mandate for generation of an e-way bill would be defeated and rendered redundant enabling the consignors to issue any number of bills having value below Rs.50,000/- and consign them in one vehicle.

> The Case of operational convenience of the Transporter

VIJAY METAL – Telangana High Court

The reason for detention of goods is that the goods were not unloaded first to the place which came first. The transporter plea was that for the operational convenience the lesser quantity of goods was to be uploaded first, thereafter goods of larger quantity would be off loaded.

The court observed as under and decided the case in favour of the applicant: –

1. The Department ignored the operational convenience of the transporter.

2. There is any rule that consignments intended for a party at a shorter distance should be offloaded first.

3. The respondent had acted mechanically without application of mind to the operational convenience of the transporter.

4. Demanding payment of GST and penalty is arbitrary, illegal and violative of Articles 14 and 300A of the Constitution of India.

> The Case of Goods taken back due to undelivered

PROGRESSIVE ENTERPRISE Vs THE STATE OF TRIPURA – HIGH COURT OF TRIPURA

The goods were sent form Guwahati to Tripura. Due to some reasons goods were not unloaded and the petitioner sought to take back the goods to Guwahati. The Driver stated to the concern inspector that he is waiting for the fresh tax invoices and e-way bills for outward transportation of the telecommunication materials. He informed him that he had in his possession the e-way bill and the tax invoice under cover of which the goods had originally moved from Guwahati to Tripura. The court held that

• The moot question that arises is that once the driver of the vehicle produces a valid e-way bill, the authorities concerned are responsible to honour the same and if any fault is found therein, action can obviously be taken up under the statute. But in the case at hand, the vehicle-in-question and the driver concerned produced the e-way bill prior to seeking permission to leave the State of Tripura and the e-way bill produced under Annexure-2 is the new e-way bill. It was obligatory on part of the statutory authorities to go through the same and if the same was found in order, to permit the transport of the machinery and/or consignment concerned.
• We are of the considered view that Rule 138 (10) of the Central Goods and Services Tax Rules, 2017 which applies in the present case and in particular second proviso thereof conceivable situation where e-way bills can either be amended or reissued for the self-same consignment, but bona fide reasons for such change must be justified. The only lawful inference therefrom is that the said Rule has been complied with by the petitioner consequent to which fresh e-way bills were issued and produced before the concerned authorities.
• Accordingly, we find no justification in further detention of the goods at the Churaibari check-post and direct release the vehicles.

> E-Way Bill Corrected by issuing fresh E-Way Bill

SATGURU IMPEX – HIGH COURT OF TRIPURA

The petitioner made mistakes in the e-way bill in the names of buyers and sellers. In place of buyer’s name, seller name was filled and in place of seller’s name, buyer name was filled. The mistake was rectified by generating fresh e-way bill. The GST departments seized the vehicle and goods due to the said mistake in the original e-way bill. The petitioner submitted that he had provided correct e-way bill after rectifying the errors happened in the original e-way bill. On this ground the vehicle and goods should be released.

The court held the case in favour of the petitioner.

• We are of the considered view that while there appeared to be an apparent mistake in the original E-way bill under Annexure-1, i.e. the name of the seller and the buyer had been erroneously swapped and, therefore, the Revenue was justified in not allowing the vehicle to enter into the State and seized the same, yet we find that once the corrected E-way bill under Annexure-3 was produced before the respondents and the apparent error having been corrected, there is no justification in either initiating the present proceedings against the petitioner or in continuing with the seizure of the vehicle along with goods.
• The aforesaid view expressed by us is founded on the belief that the role of the State Revenue authorities is highly essential and imperative for the economic growth of the State. In the case at hand, there is no dispute that the parties are genuine, nor is there any dispute that the original E-way bill contained an error. However, where the error is rectified and a corrected E-way bill is produced, it would be appropriate for the Revenue authorities to act sensibly in the manner and proceed. Causing unnecessary impediment to the free flow of goods and vehicles does cause an unnecessary hindrance to the economy of the State.

> Writ Petition allowed with cost on the GST Department 

M/s SLEEVCO TRADERS THROUGH ITS PROPRIETOR SHRI ALOK GUPTA – HIGH COURT OF ALLAHBAD

The case of the petitioner was that the petitioner on receipt of the order from K.R.Industries, Sandila, U.P., placed a purchase order to Maharastra party, namely SAFE Climber for delivery of PVC Resin, directly to its purchaser namely K.R.Industries, Sandila, UP. While the goods was in transit along with invoice given by the seller of the petitioner namely SAFE Climber, it also issued tax invoice and charged I.G.S.T. and also generated e-way bill. In the e-way bill, the name of the petitioner was specifically mentioned and it further provided that the goods to be shifted to K.R.Industries, Sandila U.P. When the goods was in transit and entered in State of U.P. and reached at Kanpur without taking delivery of the goods, the petitioner handed over the tax invoice after charging C.G.S.T. and S.G.S.T.

It is not a case of the department that the goods which were coming in pursuance of the purchase order of the petitioner from Maharashtra which were to be delivered to the buyer of the petitioner i.e. K.R. Industries, Sandila, U.P. is different than the goods mentioned in the tax invoice given by the petitioner. It is not the case of the department at any stage that the goods which were coming from Maharashtra , the delivery of the same was taken from Transporter and the goods were unloaded in the business premisses of the petitioner and thereafter the goods were again sent from the business premisses of the petitioner to its ultimate buyer i.e. K.R. Industries, Sandila. The purpose of Rule 138 A is that the information should be given to the department in respect of movement of the goods having value of more than Rs. 50,000/-. The Revenue has neither disputed the e-way bill generated by Maharastra party nor the goods in question were found different than mentioned in the e-way bill of the Maharashtra party and the tax invoices issued by the petitioner. Some difference of value has been mentioned which occurs only on charges of C.G.S.T. and S.G.S.T. on the tax invoice issued by the petitioner cannot suggest any contravention of the provisions of the Act read with Rule 138 A of G.S.T. Rules. Once the valid document i.e. e-way bill was accompanying with the goods, the authorities ought to have release the vehicle.

Once the valid document i.e. e-way bill and tax invoice, builty was accompanying with the goods, therefore the authorities ought not to have drag the petitioner in an unnecessary litigation. In view of above, the writ petition is allowed with cost of Rs.5000/- (five thousand) payable to the petitioner. The impugned order is set aside.

>  No Case of Evasion of Tax

GOVERNMENT OF WEST BENGAL Vs ASHOK KUAMR SUREKA – HIGH COURT OF CALCUTTA

 This is an appeal made by the department against the order passed by the learned Single Bench. The case of the department was that the respondent dealer took first time ground before the bench which (ground) was neither taken before the appellate authority nor in the pleadings in the writ petition. The respondent had stated anything about the vehicle being broken down or that non-extension of the validity of the e-way bill was not deliberate and willful but due to the circumstances as stated.

The Court held that we need not go into the controversy as to whether there was a break down of the vehicle, etc. The case has to be approached by considering the bona fides of the transaction as to whether the case warrants detention of the goods and collection of tax and penalty. The explanation offered by the respondent / writ petitioner was an acceptable explanation and a case cannot be made out that there was a deliberate and willful attempt on the part of the respondent / writ petitioner to evade payment of tax so as to justify invocation of the power under Section 129 of the Act. Thus, we are of the view that the relief granted by the learned writ Court is fully justified.

M/s SMART ROOFING PRIVATE LIMITED – HIGH COURT OF MADRAS

The goods were detained and order of penalty was passed against the petitioner because the branch at which the goods were being transferred within the State, was not amended in gst registration certificate.

The court held in favour of the petitioner. The order of the Hon’ble Court is as under:

• No doubt, the authorities acting under the Act were justified in detaining the goods inasmuch as there is a wrong declaration in the E-way bill. However, the facts indicate that the consignor and the consignee are one and the same entity, namely, Head Office and the Branch Office. In this case, the petitioner has a new place of business, but had not altered the GST Registration. However, steps have been taken to ex post facto include the new place of business altering the GST Registration. The registration certificate has also been amended.

Considering the fact that there is only a technical breach committed by the petitioner and there is no intention to evade tax, I am inclined to quash the impugned order and allow this writ petition by directing the respondent to release the vehicle and the consignment to the petitioner, if the same has not been released already.

M/s BIHARILAL CHHATERPAL – HIGH COURT OF ALLAHBAD

In this case the authorities have ordered for UPGST as well as equivalent penalty on the ground that at the time of interception of goods, the petitioner was not carrying U.P. E-way bill.

The contention of the petitioner was that U.P. eway bill was not applicable in his case because the transaction was interstate transaction.

On the day of such transaction trial of the national e-way bill was working. Therefore, national e-way bill did not have legal sanctity at that relevant time.

The Court held that it being an inter-State transfer of goods there was no requirement of carrying the U.P. State e-way bill – the insistence by the State authorities that the petitioner’s vehicle was not carrying the U.P. E-way bill is without any factual and legal basis – the IGST at the rate of 18% had already been paid by the petitioner – The goods were being transported along with the tax invoice etc., therefore, it was not a fraudulent transaction – respondents are directed to refund the amount deposited by the petitioners as tax and penalty under the UPGST Act 2017 – The writ petition is allowed.

> Documents furnished at physical verification stage

M/s A.S. ENTERPRISE – HIGH COURT OF ALLAHBAD

The petitioner’s case was that the petitioner could not produce relevant documents at the time of inspection of goods in transit. The same (all documents) were produced at the time of physical verification. The authority declined to verify the same. The detaining authority formed a view that further documents may be produced only along with show cause notice. The petitioner produced the entire set of documents being original invoices to establish that the goods in question were covered by regular tax invoice with respect to transaction on inter-state sale on which IGST had been paid.

Treating the above explanation to be an afterthought and solely on account of absence of such documents at the stage of interception of the goods and physical verification, it has been assumed, the goods were being imported into the State of U.P. in contravention of law. Accordingly, tax and penalty had been demanded and confiscation made.

• There is no dispute to the fact that the documents that were produced by the petitioner though at the stage of the show cause notice were original tax invoices issued by the petitioner. No enquiry was made to doubt the genuineness of such tax invoices or to doubt the date of issue of such invoices. Thus, all tax invoices produced by the petitioner to cover the disputed goods are dated 31.07.2021. No enquiry appears to have been made from the revenue authorities in the State of Punjab to confirm if the transactions were genuine. Then, it is not the case of the revenue that the goods found transported were different from the goods disclosed in the tax invoices produced by the petitioner. No enquiry was conducted by the respondent authorities either from the purchasing dealers or the Assessing Authority to doubt the transaction at the end of the consignee.
• In view of the above lack of enquiry and lack of reasonable doubt, the continued seizure and confiscation as also the demand of tax and penalty is based solely on presumptions and conjectures.

Consequently, though the detention did not suffer from any illegality, however, the further orders of the seizure etc. are found to be not based on any material or evidence on record. Accordingly, the impugned orders dated 7.10.2021 and 6.9.2021 are set aside. The goods as also vehicle may be released forthwith.

> E-way Bill expired in transit

PODDER & PODDER INDUSTRIES PRIVATE LIMITED – HIGH COURT OF TRIPURA

Due to technical fault in the vehicle the goods could not be entered in buyer’s state within time as stipulated on the e-way bill. The e-way bill was also not extended after its expiry. The vehicle was stopped at entry point of the state and the proceeding were initiated due to expiry of the e-way bill though all other documents were complete and valid.

The Court took the view that any impact on the free-flow of goods and services (bona fide) ought to be encouraged and not discouraged since the free-flow and movement of goods and services throughout the Union of India is meant to be for the purpose of development of the nation.

The court agreed that the movement of goods from one state to another is controlled by the taxation department under the GST regime on the e-way bill issue. Therefore, since the transaction admittedly is between two registered dealers located in two different states, there is no justification for stoppage in transit of the vehicle and goods.

Writ petition is disposed of directing the petitioner to appear before the check gate officer and to submit an undertaking or bond before the check gate officer and the check gate officer shall release the vehicle as well as the goods by accepting the undertaking or bond and such information as may be appropriate be provided to the assessing officer of both the seller and buyer who may be at liberty to initiate appropriate action against the registered dealer who shall be duty bound in law to make such compliances failing which they shall be liable for whatever consequences law has prescribed.

NE EQUIPMENT SOLUTIONS PVT LTD – HIGH COURT OF TRIPURA

The e-way bill expired during goods in transit. The reason for expiring the e-way bill was that the good was detained by the transport department and released after paying fine. It took time more than 24 hours for releasing the good from the transport department. The GST Department detained the good only on sole ground that the e-way bill had been expired and not accepted the new e-way bill generated by the petitioner after expiring the said e-way bill.

HELD – There is no dispute that the petitioner has collected the applicable GST on the sale of machinery and such tax is deposited with the exchequer – Dept. does not dispute that the vehicle did arrive at the check post carrying proper e-way bill and within the validity period of the e-way bill. The validity expired on account of unforeseen and unexpected delay in crossing the check post – Though the petitioner generated a new e-way bill, department was not prepared to accept it. Under the circumstances, allowing the department to detain the machinery would be wholly impermissible. The fault of the petitioner if at all is rather technical – Under the GST regime the tax authority has power to release machinery on provisional basis pending further assessment, present was an ideal case where such powers should have been exercised – tax authorities must make a clear distinction between deliberate tax evasion and technical or minor defects which manifest no intention to evade tax – When the GST liability has been fully discharged, no intention of evasion of tax can be attributed on part of the petitioner – Respondents are directed to release the machinery upon the petitioner filing an undertaking that eventually subject to appeal and further right to challenge the order of assessment, if any tax or penalty liability is crystallized, the petitioner would discharge the same – answered in favour of petitioner.

> Goods reached in time at destination but unloaded after expiry of the e-way bill

State Vs M/s HEMANTH MOTORS – HIGH COURT OF KARNATAKA

In this case the Conveyance carrying the Motor Vehicle reached at the destination place before expiry of the validity of the e-way bill. The E-Way Bill was valid upto mid night of 01-01-2019. While the vehicles were being unloaded on the next day, physical verification by authorities culminated in notice under Section 129(3) of the CGST Act since the E-way Bill had expired.

The respondent (M/S Hemanth Motors) filed an appeal before the appellate authority which was not succeeded. The respondent filed a writ petition before the Hon’ble High Court. The learned single judge quashed the order of the appellate authority and held that since the conveyance had reached the destination well within the expiry of the E-way bills, the appellate authority should have considered the merits of the proceedings in the light of the provisions of Rule 138(10) of the CGST Rules, 2017.

The GST Department aggrieved with the order of the learned single judge and went on this appeal with contention that the consignment was being delivered on next day and therefore, the goods cannot be transported within valid e-way bill.

The Hon’ble Court would not accede to the case of the department and held that the action by the authorities was taken at the destination and not during transit and therefore, as inference has to be drawn that the conveyance had reached the destination well within the subsistence of the valid period stipulated under the E-way bill – having regard to the peculiar facts and circumstances of the case on hand, the Court is not inclined to interfere with the order of the learned Single Judge – the writ appeal is dismissed.

> Valuation of Goods not the ground for detention of goods

K.P. Sugandh Ltd. – HIGH COURT OF CHHATTISGARH

In this case all documents were found complete but detention was made due to the tax payer issued tax invoice for value of goods less than value as marked MRP.

The Hon’ble Court is of the opinion that under valuation of a good in the invoice cannot be a ground for detention of the goods and vehicle for a proceeding to be drawn under Section 129 of the Central Goods and Service Tax Act, 2017 read with Rule 138 of the Central Goods and Service Tax Rules, 2017. In view of the aforesaid the impugned order passed under Section 129 and the order of demand of tax and penalty both being unsustainable deserves to be and is accordingly set-aside/quashed.

> Part B of the E-Way Bill not filled in

M/s CITYKART RETAIL PVT LTD – HIGH COURT OF ALLAHBAD

It is clear that the only allegation levelled against the petitioner leading to seizure of the goods was that Part-B of the e-way bill was not filled up. There is no allegation that the goods being transported were being transported without payment of tax. The explanation offered by the petitioner for not filling the Part-B of e-way bill, is clearly supported by the Circulars issued by the Ministry of Finance wherein the problem arising in filling the part-B of e-way bill was noticed and advisories were issued.

In the present case, prima-facie no intent to evade the duty can be ascertained, only on the allegation that Part-B of the e-way bill was not filled.

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