Case Law Details
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.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. CAN 1 of 2023 has been filed by the appellants seeking condonation of delay of 320 days in filing this appeal.
2. Learned counsel for the appellant has referred to the explanation which has been furnished in the application and also has made submission in respect of the explanation for the delay.
3. We find that the delay in filing this appeal has been sufficiently explained and the appellant was prevented from filing the appeal within time on account of bona fide reason.
4. Hence, CAN 1 of 2023 is, accordingly, allowed. The delay in filing the appeal is condoned.
5. This intra court appeal by the appellants is directed against the order passed by the learned Single Bench dated 22nd June, 2022 in WPA 10859 of 2022.
6. By the said order the learned writ court had dismissed the writ petition filed by the appellants challenging the order passed by the appellate authority dated 20th July, 2022 confirming the order of levying 100% tax and penalty.
7. On the ground that the appellants had approached the writ court almost after two years after the appellate authority had passed the order. The explanation given by the appellants is that the appellants, being aggrieved by the order passed by the appellate authority was entitled to go before the Tribunal.
8. However, since a Tribunal was not constituted, the appellants were advised to await the Constitution of the Tribunal and thereafter since the Tribunal was not constituted for almost two years, the appellants were advised to file the writ petition. In any event the appellants had already paid the tax and penalty and therefore, we are of the view that the matter can be decided on merits.
9. The undisputed facts are that the goods in question were meant for export and the appellants had generated an e-Way Bill which was valid till 12th September, 2019.
10. The appellants’ case is that the goods while being loaded into the vessel and had got damaged and as a result, the goods had to be taken back to the appellants factory at Ranchi for repairs. For such purpose the e-Way Bill was generated based on a challan on 7th September, 2019 which was valid till 12th September, 2019.
11. On perusal of the e-Way Bill, it is seen that no tax was payable since the goods which were owned by the appellants were taken back to their factory at Ranchi for repairs. The goods were detained while in transit at about 8.20 a.m. on 13.09.2019. In terms of Rule 138(10) of the WBGST Rules an option is given to the assessee to extend the period of e-Way Bill and such extension should be done before eight hours and after eight hours of the expiry of its validity. Admittedly the eight hour period expired about 8.10 m. on 13.09.2019 and at about 8.20 a.m. the goods were intercepted and detained.
12. The identical issue was considered by the Court in various matters and some of which being in the case of Progressive Metals Pvt. Ltd. v. The Deputy Commissioner, State Tax, Bureau of Investigation, South Bengal, Durgapur Zone & Ors. in MAT 562 of 2023 dated 28.04.2023 and in KDG Projects Pvt. Ltd. v. Assistant Commissioner of State Tax, Bureau of Investigation (North Bengal) reported in 2022(66) G.S.T.L. 262 (Cal) and the decision in Medha Servo Drives Private Limited & Anr. v. The Assistant Commissioner of, State Tax, Bureau of Investigation (South Bengal), Durgapur Zone & Ors. in MAT 1751 of 2022 dated 17.11.2022. In all these matters the Court considered the conduct of the assessee and having found that the conduct was not with the intention to evade tax, granted relief to those assessees. The case on hand also would fall under the said category since there is no allegation of any evasion of tax rather it is not disputed that the goods were being transported under a cover of challan to the factory of the appellants for carrying out repairs.
13. Considering the peculiar facts and circumstance of the case, this Court is of the view that it is not a fit case where tax and penalty should have been levied on the appellants.
14. For the above reasons, the appeal as well as the writ petition is allowed and the orders impugned in the writ petition are set aside and quashed.
