Expiry Of E-way Bill Does Not Create Any Scope For Tax Evasion: Madras High Court Imposes Minor Penalty

The Madras High Court has imposed a minor penalty and held that the expiry of the E-way bill does not create any scope for evasion.

The single bench of Justice M. Sunder has observed that assuming there was no breakdown and assuming the portal was active, the maximum penalty would be Rs. 5,000.

A truck that was carrying a consignment described as "Angles" from Gummidipoondi to Ranipet was intercepted in the wee hours, i.e., at about 4 a.m. at the Walaja toll. Following the interception, the decision was made to detain the truck carrying the cargo. The only ground on which the proceedings have been made is that the E-way bill had expired.

The petitioner claimed that the truck transporting the consignment broke down, requiring repair and causing a delay. The portal was blocked without access to renew the E-way bill, though four more hours to do so were available at the time of the truck's interception.

Despite the fact that the driver of the truck transporting the consignment made no mention of breakdown and repair, the department issued the order. Though there was no mention of the portal being blocked, it has been mentioned that no steps have been taken to extend the E-way bill.

As per the circular dated May 31, 2019, where the movement of goods is accompanied by any one of the basic documents such as an invoice, a bill of supply, a delivery challan, or an E-way bill, and in such cases where at least one of the basic documents, manifestly showing the suffering of tax in the particular transaction, is available, a penalty of up to Rs. 5,000 per act shall be levied so as to deter the recurrence of the offense.

The court noted that there would have been no revenue loss to the respondent or state if the truck had reached its destination without being intercepted.

The court quashed the proceedings and directed the writ petitioner to pay a penalty of Rs. 5,000.

Case Title: Tvl.Thiruvannamalaiyar Transport Versus The Deputy State Tax Officer

Citation: 2023 LiveLaw (Mad) 24

Case No: W.P.No.32960 of 2022 and WMP.No.32361 of 2022 in W.P.No.32960 of 2022

Date: 13.12.2022

Counsel For Petitioner: Advocate B.Raveendran

Counsel For Respondent: Government Advocate T.N.C.Kaushik

Click Here To Read The Order