Expiration of an e-Way Bill during transit does not invoke penalties under Section 129 without evidence of intent to evade taxes.

JUDGMENT :

(Deepak Roshan, J.):

Heard learned counsel for the parties.

2. The instant writ petition has been preferred by the petitioner for following reliefs:

(a) For issuance of an appropriate writ, order or direction, directing upon the respondents to show cause as to when from the originating State of movement of vehicle, genuine e-Way Bill was available, but only because of the fact that e-Way Bill had expired for genuine reasons, if at all, would attract section 129 of the Act, 2017 in the absence of any intention to evade taxes or contravention of provisions of the Act.

(b) For issuance of an appropriate writ, order or direction, for quashing and setting aside the order dated 08.11.2021 (Annexure-4) passed by the Ld. Assistant Commissioner CGST & CX, Jamshedpur (Hqrs.), whereby and whereunder, tax and penalty to the tune of Rs. 5,18,660.00/- has been imposed on the ground that e-Way Bill had lost its validity, without any finding of evasion of tax, which otherwise is bad in law.

(c) For issuance of an appropriate writ, order or direction, for quashing and setting aside the order dated 26.05.2022 (Annexure-8), wherein the Ld. Joint Commissioner (Appeals) CGST & CX, Ranchi, had been pleased to dismiss the Appeal preferred by the Petitioner upholding the order dated 08.11.2021 (Annexure-4) passed by the Ld. Assistant Commissioner CGST & CX, Jamshedpur (Hqrs.).

(d) Consequently, issue an appropriate writ, order or direction, directing the Respondent Authorities to refund the amount paid by the Petitioner in lieu of demand of tax and penalty raised by the Respondent No. 3 along with applicable interest in accordance with the provisions of the Central Goods and Services Tax Act, 2017 read with the prescribed rules under Central Goods and Services Tax Rules, 2017.

3. The brief facts of the case as disclosed in the instant application is that the petitioner-company is engaged in the business of manufacture and supply of electric welded steel tubes. One M/s. Bhalotia Auto Products Private Limited, Purba Singhbhum, placed an order to the petitioner situated at Kolkata, West Bengal, for supply of 20.010 MT of MSPB RHS/SHS to its business premise at Purba Singhbhum. The petitioner raised Invoice bearing No. TCGF/02193/22 against the order placed and dispatched the same from West Bengal to Jamshedpur under proper cover of documents including e-way bill bearing no. 8111 8796 5282, in truck bearing no. JH 05AG 2092.

While the goods were in transit, the truck was intercepted on 06.11.2021 at 08:30 AM by the Inspector, Anti-Evasion, CGST & CX, Jamshedpur, for verification/inspection, on which it was found that the e-Way bill had expired on the previous date i.e., on 05.11.2021 at 12.00 AM and statement of the truck driver was recorded in Form GST MOV-01 and subsequently the vehicle along with the goods were directed to be stationed at GST Bhawan, Outer Circle Road, Bistupur, Jamshedpur, by issuance of Form GST MOV-02 dated 06.11.2021. Pursuant thereto, physical verification was carried out and a report was issued in Form GST MOV-04 wherein, no discrepancy was found in the description of goods and quantity as mentioned in the invoice.

Thereafter, an order of detention in Form GST MOV-06 and Show Cause Notice in Form GST MOV-07 were also issued in the name of the truck driver and personal hearing was fixed on 08.11.2021 at 04:30 PM. Surprisingly, on the very same day, without affording proper opportunity of hearing as contemplated in discharge of principles of natural justice, an order of demand of tax & penalty has been passed u/s 129(3) of the Act and Form GST MOV-09 has been issued by Respondent No. 3 solely on the ground that the validity of the e-Way bill had expired.

Having no option but to release the truck, the petitioner company deposited the entire demand raised and confirmed by Respondent No. 3 vide Form GST DRC-03 for release of goods and the vehicle which was informed to the department vide petitioner’s letter dated 09.11.2021