Officer Is Duty Bound To Consider Explanation Offered For Expiry Of The E-Way Bill: Kerala High Court

The single bench of Justice Gopinath P has observed that the officer rejected the explanation offered by the petitioner by stating that no evidence of repair being carried out has been produced. The officer imposed a penalty/tax on the grounds that the petitioner had ample time to revalidate the E-way bill.

The petitioner is in the business of transportation of goods. It has an agreement with M/s. Tata Motors Limited for the transportation of commercial and passenger vehicles and chassis, which are driven to various destinations as required by that company. The petitioner, at the request of M/s. Tata Motors Limited, transported a new tipper lorry (the goods) from Tamil Nadu to Kozhikode, Kerala. The vehicle was intercepted and detained by the Assistant State Tax Officer of the Kerala GST Department, and a show cause notice was issued on 9.7.2019 at 12.20 p.m. It was found that the e-way bill had expired on 8.7.2019.

The petitioner moved the High Court, and the lorry was directed to be released on the production of a bank guarantee. Following the directions of the Court, the notice was adjudicated and an order was issued on 16.8.2019, imposing a penalty on the petitioner along with a demand for IGST. The petitioner preferred an appeal against the order under Section 107 of the CGST/SGST Acts.

The appeal was filed by the petitioner. The department stated that the appeal could not be entertained as the petitioner had not paid any admitted tax and there was no pre-deposit of 10% of the disputed tax. The stamp paper equivalent to 1% of the disputed tax was not remitted towards the legal benefit fund.

The petitioner contended that there was no warrant for imposing any penalty on the petitioner. There was no suppression or evasion of tax. The e-way bill was valid up to 11.59 p.m. on 8.7.2019, and the vehicle was intercepted the next day. Though the writ petition proceeded to state that the vehicle was intercepted at 12.20 a.m. on 9.7.2019, it was clear that the detention was at 12.20 p.m. on 9.7.2019. The vehicle had failed to cross the check post on 8.7.2019 itself because it developed some mechanical problems on its way to Kozhikode and had to be taken to a workshop.

The department contended that the petitioner could not have been allowed to continue the transport without extending the validity of the e-way bill as provided under Rule 138 (10) of the CGST Rules. Though there is an enabling provision, the transport could not have continued without extending the validity of the e-way bill.

The issue raised was whether the imposition of a major penalty along with a demand for IGST was justified for the reason that the e-way bill had expired.

The court held that all documents along with the e-way bill were available at the time of detention and no discrepancy was noted in regard to documents except the expiry of the e-way bill. There was no finding that there was an attempt to evade the tax.

Case Title: Sanskruthi Motors Versus The Joint Commissioner (Appeals) II

Citation: WP(C) NO. 17223 OF 2022

Citation: 2022 LiveLaw(Ker) 462

Dated: 17.08.2022

Counsel For Petitioner: Advocates V.Premchand, Surya Mohan P. Counsel For Respondent: Advocate DR. Thushara James

Click Here To Read/Download Order