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2021 Supreme(Tri) 188
HIGH COURT OF TRIPURA AGARTALA
Akil Kureshi, CJ., Arindam Lodh, J.
Ne Equipment Solutions Pvt. Ltd. - Appellant
Versus
State of Tripura & Ors. - Respondents
WP(C) No. 577/2021
Decided On : 24-08-2021
Mr. B.N. Majumder, Sr. Advocate, Mr. Bikash Paul, Advocate, for the Petitioner; Mr. P.K. Dhar, Sr. G.A, Mr. K. De, Addl. G.A, for the Respondent
Authority must distinguish between minor technical issues and deliberate tax evasion; timely release of detained goods is essential to prevent damage and inconvenience when tax liabilities are duly paid.
Headnote:(A) Central Goods and Services Tax Act - Sections 129(3) and 192A of the Motor Vehicles Act - Petition for release of machinery detained while in transit due to alleged absence of registration in the state - Validity of e-way bill expired during unforeseen delay caused by transport authorities - Court held that no tax evasion was intended as dues were paid; thus release ordered. (Paras 1, 6, 8, 12)
(B) GST regime - Powers of tax authorities - Immediate release of machinery deemed necessary to prevent deterioration and inconvenience to buyer; distinguishing between deliberate tax evasion and technical defaults. (Paras 10, 11)
Facts of the case:
The petitioner, a company engaged in construction machinery sales, sought release of an excavator detained at a check post due to registration issues, despite valid GST payments and e-way documentation. Detention occurred after paying a fine to the transport department.
Findings of Court:
Machinery released; the petitioner must file an undertaking for any potential tax liabilities post-assessment. E-way bill acceptance after delay due to transport checks should not penalize the petitioner.
Issues: Whether the machinery can be released despite e-way bill expiration due to circumstances beyond the petitioner's control and the reliability of provided documentation.
Ratio Decidendi: The court determined that the absence of intent to evade tax and proper compliance with GST obligations outweighed technical reasons for detention. The timely release was necessary to prevent potential loss and damage to the machinery.
Result: Petition disposed of with directives for release.
JUDGMENT
Akil Kureshi; CJ.:--
Rule.
Learned Addl. Government Advocate Mr. K. De waived rule on behalf of the respondents.
Petitioner has prayed for release of the machinery which has been detained at Churaibari check post while it was in transit from Silchar to Khowai. Brief facts are as under:
The petitioner is a company registered under the Companies Act and is engaged in the business of dealing in TATA Hitachi Construction Machinery. The petitioner has its Head Office at Silchar and a Branch Office at Agartala. In the course of the business, the petitioner sold one TATA Hitachi Hydraulic Excavator Model No. EX 210 LC to one Satya Sundar Das of Khowai. The cost of machinery was Rs.49,66,102/- on which IGST of Rs.8,93,898/- was collected from the purchaser and duly declared in the sale invoices. The excavator was being transported from Silchar to the head office of the petitioner company at Agartala under properly generated e-way bill dated 14.08.2021 with a validity period up to 16.08.2021.
The machinery we are informed, was being transported in a truck trailer and started its journey from Silchar on 15.08.2021. When the transport vehicle reached at Churaibari check post in the early morning hours of 16.08.2021, the transport department of State of Tripura detained the vehicle on the ground that the excavator had no registration in the State of Tripura which was violative of Section 192A of the MOTOR VEHICLES ACT . Eventually the transport authority released the order of detention on 17.08.2021 upon the petitioner paying fine of Rs.10,000/-. In the meantime, however, the validity of the e-way bill had expired. The vehicle was now intercepted by the GST authorities at Churaibari check post on the ground that the driver did not have valid e-way bill for the machinery being brought within the State. According to the petitioner, a fresh e-way bill was also generated on 18.08.2021, however, the authorities refused to accept the same as a valid document for passage. On 19.08.2021 the Superintendent of Taxes, Churaibari Enforcement Wing issued a show-cause notice to the petitioner under section 129(3) of the Central Goods and Services Tax Act and the State Goods and Services Tax Act calling upon the petitioner why unpaid tax with penalty totaling to Rs.17,87,796/- should not be recovered from the petitioner. At that stage, the petitioner has approached this Court primarily for release of the machinery.
Having heard learned counsel for the parties and having perused the materials on record, we are of the opinion that the machinery in question should be released forthwith. The facts are eloquent. The department does not dispute that the petitioner has collected the necessary GST on the sale of machinery as indicated in the sale invoice. There is no allegation of such tax not being deposited with the Government revenue. The department is not in a position to dispute that the vehicle did arrive at Churaibari check post carrying proper e-way bill and within the validity period of the e-way bill. The validity expired on account of unforeseen and unexpected delay in crossing the check post since the transport department stopped the movement of the vehicle on the ground that the machinery was not registered in the State of Tripura. This issue was cleared when the transport department imposed a fine of Rs.10,000/- which the petitioner paid. This process, however, took more than 24 hours and in the meantime, the validity of the e-way bill expired. Though the petitioner generated a new e-way bill, the GST department of the State was not prepared to accept it.
Under the circumstances, allowing the department to detain the machinery would be wholly impermissible. The fault of the petitioner if at all is rather technical. The machinery costs nearly half a crore of rupees on which the Government revenue has already earned substantial tax. Detaining such machinery at the check post would expose it to deterioration particularly in the present season of he
