HC holds E-way Bill mandatory if aggregate value of consigned goods through multiple Bills exceed Rs.50,000/- although each individual Bill is below Rs. 50,000/-

The Kerala High Court in the case of Bon Cargos Private Limited vs Union of India and Ors. in Writ Appeal No.1735 & 1736 of 2020 decided on 21-12-2020 has ruled  that E-Way Bill is mandatory for transporting goods where value of each individual invoice is lower than Rs.50,000  but exceeds Rs. 50,000 when aggregated. This judgement is of vital importance as most of the dealers/suppliers/ manufacturers commit this fatal mistake inadvertently and are subjected to heavy penalty & unwanted detainment of their valuable goods.

It is common knowledge that Dealers/Suppliers often issue multiple invoices of amounts lesser than  Rs. 50,000/- for total goods of more than Rs. 50000/- for various reasons. Sometimes, the internet connectivity is poor or the person who is well acquainted with E-way Bill generation is not available at the requisite time or the Bills are meant to be destroyed once the goods reach the Consignee for evading GST or the same Bills have to be used again for sending the goods multiple times to evade GST or mostly because of ignorance of the GST law & it’s provisions in this regard.

The brief facts of the case in both the writ appeals are that the goods were detained by the GST department as the transporter carried two individual invoices under Rs.50,000/- but the aggregate of both the Bills exceeded Rs 50000/- . Since the transporter did not have E way Bill, the goods were detained and subjected to Tax & Penalty. It is pertinent that the above goods were also transported in the same vehicle together.

The appellant pleaded that Rule 138 provides only for generation of e-way bill with respect to movement of goods of consignment value exceeding Rs.50,000/-. Since both the invoices were lesser than Rs. 50,000/-, the appellant claims that there was no requirement of generation of E-way Bill as mandated by the Rule 138 of GST Act.

The Court discussed the applicability of Rule 138 in details and held as under:

“At the outset it is to be noticed that it is not the invoice value that provides the limit. Sub-Rule (1) of Rule 138 provides that before commencement of movement of goods, information relating to the goods consigned, as specified in Part A in FORM GST EWB-01 shall be furnished electronically on the common portal. The first proviso also enables a transporter, with authorisation from the registered person, to furnish such information. Sub-Rule 2 enjoins the supplier or the recipient to furnish such information before or after the commencement of movement, again on the common portal in Part B. Sub-Rule (3) provides that when an e-way bill by the consignor or the consignee in Part B, as provided in sub-Rule 2 is not generated, the transporter shall furnish the information by generating Part A.

Explanation 2 defines the consignment value of goods to be that declared in an invoice, a bill of supply or a delivery chalan including the goods and services tax payable with any Cess charged. Sub-Rule (1) read with Explanation 2 leads to only one inference that the consignment value has to be determined from the invoice. But 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 consignment value is that shown in the invoice. 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.”

Dismissing the Writ Appeal, the Court observed thus:

“We are hence not satisfied that the detention was without jurisdiction. As pointed out by the learned Senior Government Pleader in one case already an adjudication order is also passed.

We neither interfere with the judgment of the learned Single Judge nor discern a valid ground to find lack of jurisdiction in the Statutory Authority, who carried out the detention.”

This case is an eyeopener for those involved in such practice deliberately or inadvertently. It is imperative that E-way Bills be generated in case the aggregate value of the consigned goods exceed Rs. 50,000/-.

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March 2021