Back
Admits Ford India Plea Against GST Demands Over E-Way Bill Discrepancies
The has admitted a writ petition filed by challenging and issued under , arising from alleged discrepancies between taxable values and e-way bill data. The Division Bench of Justices A.S. Supehia and Vaibhavi D. Nanavati continued the granted earlier, observing that the adjudicating authority itself expressed inability to reconcile the voluminous data provided by the company.
A Dispute Over 4.5 Lakh E-Way Bills
The proceedings originated from audit queries by the , which flagged alleged suppression of taxable value when compared with e-way bill data for . Ford India supplied extensive documentary evidence to the Range Officer, including invoices and e-way bills, but the authorities issued under Section 74 invoking the extended five-year period, alleging suppression.
Ford India contended that the adjudicating authority failed to follow the scrutiny procedure under before initiating proceedings under Section 74. The company argued that the authority never called for additional material despite the complexity of the data, which included approximately 4.5 lakh e-way bills and 2.5 lakh invoices.
'No Mechanism to Understand' – The Authority's Own Admission
, appearing for Ford India, highlighted that the impugned recorded the adjudicating authority's inability to analyse the data. In paragraph 15.11, the authority noted that on examining over 2,000 entries in MS Excel format, “it is not possible to ascertain as to which particular invoices were affected by this error and subsequently how these have been reconciled in the relevant returns.” The authority similarly expressed difficulty in reconciling supporting documents from the books of account.
The Revenue, represented by , opposed the petitions, arguing that Ford India bore the under and that the procedure under Section 61 was not a prerequisite for invoking Section 74.
View: No Intent to Suppress
The court found merit in Ford India's submissions. It observed that the adjudicating authority's inability to analyse the delivery channels, e-way bills, and invoices “depicts the inability of the adjudicating authority in closely analyzing the details” and that the authority “himself has expressed his inability to undertake such exercise, as there is no mechanism to understand this.”
Significantly, the court noted that Ford India was never asked to supply additional material. Considering the sheer volume of documents—4.5 lakh e-way bills and 2.5 lakh invoices—the court concluded that “there was no intention of the petitioner to suppress or evade the liability of payment of the GST.”
Key Observations from the Judgment
“, we are of the opinion that the impugned depict the inability of the adjudicating authority in closely analyzing the details of delivery channels, corresponding e-way bills, invoices, etc., as he himself has expressed his inability to undertake such exercise, as there is no mechanism to understand this.”
“The petitioner was never called upon to supply any additional material by the adjudicating authority, and as informed to us, there are almost 4.5 lakhs e-way bills and 2.5 lakhs invoices, which would suggest that there was no intention of the petitioner to suppress or evade the liability of payment of the GST.”
Decision and Continuing Relief
The High Court admitted the petitions, issued , and ordered that the granted on shall remain in operation until final disposal. The court also directed the registry to place a copy of the order in the connected matter, reflecting the complexity and high stakes involved—Rs. 4.57 crore in one petition and Rs. 1,936.67 crore in the other.
The case underscores the importance of proper reconciliation mechanisms in GST audits and the need for adjudicating authorities to meaningfully engage with voluminous documentary evidence before levying demands under Section 74.
