Vardan Associates Pvt. Ltd. Vs Assistant Commissioner of State Tax Central Section & Ors. (Supreme Court of India)
The Supreme Court of India recently delivered a significant judgment in the case of Vardan Associates Pvt. Ltd. vs. Assistant Commissioner of State Tax Central Section & Ors. The case involves the transportation of goods and the imposition of penalties after the expiry of the E-way bill validity. The Court reduced the penalty imposed on the appellant to 50% of the initial amount. This article provides a comprehensive analysis of the case, highlighting the key legal arguments and the implications of the Supreme Court’s decision.
Background: The appellant, Vardan Associates Pvt. Ltd., is engaged in horizontal directional drilling for underground utilities. The case arises from the transportation of a capital goods consignment from Auraiya, Uttar Pradesh, to Durgapur, West Bengal. The appellant generated an E-way bill for the transportation, but due to unforeseen circumstances, the consignment was intercepted after the expiry of the E-way bill validity. The authorities imposed a significant tax and penalty, leading to the appellant filing an appeal.
Legal Arguments:
Appellant’s Submission:
- The appellant argued that the delay in transportation was due to the unavailability of a vehicle from the transporter, M/s. Hariom Freight Carriers (HFC), in Auraiya, Uttar Pradesh.
- Despite depositing 10% of the tax amount and being ready to pay the remaining tax and provide a bank guarantee for the penalty, the authorities denied the release of the consignment, which the appellant deemed arbitrary.
- The appellant contended that the consignment, being its property, should not be subject to GST, as it was an “inter unit transfer” of capital goods rather than a sale/purchase transaction.
Respondents’ Counterarguments:
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