HC deletes penalty despite E-way bill expiry as found no intention to evade tax

Usha Martin Limited Vs Deputy Commissioner of State Tax (Calcutta High Court)

Introduction: The case of Usha Martin Limited Vs Deputy Commissioner of State Tax brought before the Calcutta High Court, illuminates the complexities and legal challenges that can arise in tax cases, specifically those related to the expiration of e-Way Bills and tax levies.

Analysis: The key contention in this case revolved around the expiration of an e-Way Bill and the subsequent levy of 100% tax and penalty. Usha Martin Limited had generated an e-Way Bill for goods intended for export. However, these goods were damaged during loading onto the vessel and had to be returned to the company’s factory for repairs. They were then detained in transit after the e-Way Bill expired, and the company was unable to extend its validity within the required time frame.

Upon consideration, the Court, citing similar previous cases, found no intention to evade tax by the company. The Court further observed that the goods were indeed being transported under a cover of challan to the company’s factory for repair works. In light of these findings, the Court ruled that the levied tax and penalty were unjustified.

Conclusion: This ruling demonstrates the Court’s focus on the intention behind actions when interpreting legal provisions, particularly concerning tax matters. Here, despite the procedural issues with the e-Way Bill, the Court found in favor of Usha Martin Limited, ruling that there was no tax evasion, thereby overruling the levied tax and penalty. The judgment underscores the importance of fair assessment and application of tax laws and the need for transparent business practices.

Please become a Premium member. If you are already a Premium member, login here to access the full content.