What If Goods Detained Due To Expiry of Bill During Transit

Many times, businesses face detention due to expiry of e -way bill and non-extension of eway bill.

In these cases officers invoke penalty of section 129 and sometimes even section 130 confiscation is invoked

Here is a detailed  article on provisions and various judgements on it

RELATED PROVISION

♦ 2nd proviso to rule138(10) provides that where, under circumstances of an exceptional nature, including transhipment goods cannot be transported within the validity period, the transporter may extend the validity after updating the details in Part B of Eway-bill

♦ Provided also that the validity of the e-way bill may be extended within eight hours from the time of its expiry.

Below are various judgements of different courts which can be used for argument

VARIOUS JUDGEMENTS

♦ Patna high court

• In the case of Ram Charitra Ram Harihar Prasad Vs State of Bihar (Patna High Court), the high court quash the proceedings of 129 in its entirety together with the demand and passed the order of release
• It held that when the e-waybill provisions allow to extend the validity period of the e-way bills on its expiry after updating the details in part B of form GST EWB-01 and generation of the new E-way bill is before detention order, it is valid if transaction is authentic

♦ Calcutta high court

• In the case of Ashok Kumar Sureka vs Assistant commissioner, state tax, the HC set aside order of detention on ground of expiry of eway bill and held assessee entitled for refund of penalty and tax paid
• Also held that since there was delay of few hrs in extending eway bill and cannot be considered as wilful default, as it was due to breakdown of vehicle and no intention to evade tax

♦ Tripura high court

• In the case of NE Equipment Solutions Pvt Ltd vs State of Tripura & Ors, HC directed dept to release transport vehicle and machine where validity of eway bill expired on unexpected delay in crossing of check-post since transport dept stopped the vehicle
• Also held that revenue dept already earned substantial amt of tax on machinery, allowing to detain it will wholly impermissible

♦ Honourable Supreme court

• SC validated judgement of Telangana HC in case of Satyam shivam papers that tax evasion cannot be presumed on non-extension of eway bill due to traffic blockage for which revenue authority is responsible for not providing smooth passage of traffic

♦ Gujarat High Court

• In the case of ‘Synergy Fertichem Pvt. Ltd ‘HC held that without any application of mind and without any justifiable grounds or reasons to believe, the authorities may not be justified to straightway issue a notice of confiscation under Section 130
• It also held that for the purpose of issuing notice of confiscation under Section 130, at the stage of Section 129 of the Act itself, case is of nature that the authority concerned is convinced that the contravention was with a definite intent to evade payment of tax.

♦ Telangana High Court

• In case of Shree Rama Steel, HC held that evasion for payment of tax is precondition for the invoking of Section 129.
  Para 71 of that judgement is extracted below:
• If intention of petitioner to unload the goods at Katedan, Hyderabad is pursuant to request from its purchaser to deliver at the latter’s Job work site in Katedan and not to evade the tax or contravene any provision of law, no adverse inference can be drawn against petitioner

If your situation falls in above cases or related to it, you can argue by giving references to that judgement and get saved from proceeding of section 129 which cause

Penalty = 200% of tax payable in case of taxable goods