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  • Penalty cannot be charged by the GST Officer merely on the ground that E-way Bill has expired Where consignment of the petitioner was detained by Deputy State Tax Officer on ground that validity of E-way bill had expired and petitioner had to pay an amount towards tax and penalty for release of goods, it was held that there was no material before respondent to detain petitioner merely on account of lapsing of time mentioned in E-way bill and respondent was directed to refund amount collected from petitioner

Penalty cannot be charged by the GST Officer merely on the ground that E-way Bill has expired Where consignment of the petitioner was detained by Deputy State Tax Officer on ground that validity of E-way bill had expired and petitioner had to pay an amount towards tax and penalty for release of goods, it was held that there was no material before respondent to detain petitioner merely on account of lapsing of time mentioned in E-way bill and respondent was directed to refund amount collected from petitioner

  • vide decision of High Court of Telangana in Satyam Shivam Papers (P.) Ltd. v. Assistant Commissioner of Services Tax

Facts of the case:

  1. The petitioner is a Private Limited Company registered under the Companies Act, 1956 and carries on trading business in all kinds of paper. It also has valid GST Registration.
  2. It is the sole distributor of M/s. International Papers Limited, Andhra Pradesh, and it also effects inter-State purchases of papers from M/s. Emami Papers Ltd., Orissa
  3. The petitioner made an intra-State supply of paper through a tax invoice dt.04-1-2020 to M/s. Sri Ayappa Stationery and General Stores, Medchal in Telangana State which is also registered under the GST Act and had also generated an e-way bill dt.04-1-2020. The goods were delivered to a transporter for making delivery to the consignee by an auto trolley
  4. Petitioner contends that the auto trolley started for delivery of the paper at 04:33 p.m. on 4-1-2020 to the consignee, but on its way, on account of a political rally being conducted by certain political parties, traffic was blocked at Basheerbagh, Hyderabad, that the road got jammed from all corners and the auto trolley could not move forward or backward.
  5. Petitioner alleges that this continued till 08:30 p.m. and by that time, the shop of the buyer could be closed, and so the auto trolley driver took the trolley to his residence with the goods so as to deliver them on the next working day.

04-1-2020 was a Saturday, and 5-1-2020 was a Sunday, and the next working day was 6-1-2020.

  • Petitioner contends that on 6-1-2020, the auto trolley was on its way for delivery of the paper to the buyer/consignee but it was detained by the Deputy State Tax Officer, Bowenpally-II, Circle, Begumpet Division(respondent) at Tadbund at 12:35 p.m.; and a Detention Notice in Form GST MOV-07 dt.06-1-2020 was served alleging that the validity of the e-way bill had expired proposing to impose tax and penalty.
  • It was further alleged by the petitioner that the respondent unloaded the paper boxes at a private premises in the house of respondent's relative's at Marredpally, Secunderabad without tendering any acknowledgment of receipt of detention of the goods in his custody, and released the auto trolley by unloading the goods in such a manner.
  • Petitioner alleges that this action of the respondent is arbitrary and illegal and he could not have taken physical possession of the goods in such a manner.
  • Petitioner alleges that it made representation on 7-1-2020 to the respondent and sought for release of the detained goods by explaining reasons which resulted in expiry of the e-way bill.
  • He also submitted representation on 8-1-2020 by enclosing copy of the Rule 138 of the CGST Rules, 2018 wherein the validity period of the e-way bill for more than 20 kms can be extended for one more additional day and also enclosed copy of the decision rendered by the Allahabad High Court in Writ Tax No. 1471 of 2018.
  • Petitioner further alleges that the respondent received the said letter dt.08-1-2020, but did not acknowledge receipt of the same and did not also release the goods.
  • Petitioner alleges that he waited for release of the detained goods till 19-1-2020 and since it did not seem likely that the respondent would release the goods in spite of submitting explanation for release, it made payment of Rs. 17,250/- under CGST Act, Rs. 17,250/- under SGST Act, Rs. 17,250/- towards penalty under CGST Act and Rs. 17,250/- towards penalty under SGST Act, amounting to Rs. 69,000/-.
  • Also, the petitioner submitted a letter dt.20-1-2020 in the office of the respondent. According to petitioner, some of the paper packets in the boxes had also gone missing in the mean time.
  • Petitioner further alleges that the respondent passed an order on 22-1-2020 in Form GST MOV-09 ignoring the representations submitted by petitioner on 7-1-2020 and 8-1-2020 and also the decision of the Allahabad High Court, and mentioning that petitioner admitted that tax and penalty are payable, which is factually incorrect since the petitioner had never admitted the same.
  • According to petitioner, only after payment of the amount of Rs. 69,000/- on 22-1-2020, release order was issued by the Office of the respondent.
  • The respondent responded by quoting Rule 138(10) of the GST Act, 2017 which extended the validity of an e-way bill for one additional day and contended that the distance from the destination was less than 100kms and so the e-way bill was valid only for an extra 24 hrs; that such extension can be made four hours before expiry or four hours after expiry, but the e-way bill of petitioner was not so extended and added that the drivers of the auto trolleys expressed ignorance of the expiry of the e-way bill
  • The respondent also stated that the goods were kept in the premises of a known person on 6-1-2020 because it was a rainy day and the respondent further stated he received the letter dt.08-1-2020 enclosing the judgment of the Allahabad High Court, and stated that he did not follow it because in the instant case there was a clear evidence of evasion of tax.
  • It was also stated that as per the Act, a dealer can extend the validity of an e-way bill in Part-B and the same can be sent even to the driver's mobile phone, but the dealer willfully did not do so, and expiry of the e-way bill cannot be treated as a technical mistake. He justified the levy of penalty and tax on the petitioner in this manner.

Judgement:

The Writ Petition is allowed; the order dt.22-1-2020 passed by the respondent in Form GST MOV - 09 and levying tax are directed to refund the said amount collected from petitioner within four weeks with interest@ 6% p.a from 20-1-2020 when the amount was collected from petitioner till date of repayment. The respondent shall also pay costs of Rs. 10,000 to the petitioner in 4 weeks.

and penalty of Rs. 69,000/- on the petitioner, is set aside. The respondents

https://www.taxmann.com/preview-document?categoryName=gst-new&fileId=101010000000315433&subCategory=caselaws

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