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2022 (9) TMI 91 - Commissioner - GSTSeizure of goods alongwith the vehicle - the e-way bill was found expired at the time of inspection of the vehicle - levy of tax alongwith the penalty - HELD THAT - The person in-charge of the conveyance carrying any consignment of goods of value exceeding Rs.50,000/- should carry a copy of documents v.i.z invoice/bill of supply/delivery challan/bill of entry and a valid e-way bill in physical or electronic form for verification. Non furnishing of information in Part-B of form GST EWB-01 amounts to the e-way bill becoming not a valid document for the movement of goods by road as per Explanation (2) to rule 138(3) of HPGST/CGST Rules, except in the case where the goods are transported for a distance of fifty KM within the state or Union Territory to or from the place of business of the transporter to the place of business of the consigner or the consignee. as the case may be. As per the orders of the proper officer notice under section 20 of IGST Act read with section 129 of the HP GST Act was issued on 01/07/2019 directing both the supplier and the recipient to appear on or before 01/07/2019 at 3.00 PM to explain as to why penalty under the above stated sections should not be imposed. It is further mentioned in the order that the validity of the c-way bill had expired on 12/05/2019, whereas, the vehicle was detected on 01/07/2019 - Moreover in the impugned order there is not even a whisper nor in the body of the order which shows that the Appellant was liable to payment of tax and penalty despite the fact that IGST had already been paid on the transaction under question. The order is totally bereft of any reasoning. Before the commencement of movement of goods the supplier had raised the tax invoice. The e-way bill was also generated prior the commencement of movement which contained the details of goods, tax invoice, as well as the buyer of the goods including his registration number under the GST Act. Once the tax invoice is issued and the e-way bill generated through online GST Portal containing all details regarding the goods the information of such transaction is available with GST authorities also, therefore, the possibility of tax evasion is very remote. The tax/penalty under section 129 of CGST/HPGST Act 2017 cannot be imposed merely on the basis of Expiry of E-Way bill and without proving the intention to evade the tax - the impugned order passed by the Proper Officer are quashed and set aside. However, a penalty of Rs. 15,000/- is imposed under section 125 of HPGST/CGST Act on the Appellant. Respondent is directed to recover the amount of penalty and refund the balance to the Appellant as per law - appeal allowed.
Issues Involved:
1. Imposition of tax and penalty under Section 129 of HPGST/CGST Act, 2017. 2. Validity and extension of the e-way bill. 3. Alleged violation of natural justice principles. 4. Determination of tax liability and double payment of IGST. 5. Procedural lapses by the Proper Officer. 6. Applicability of Supreme Court judgment in similar cases. Detailed Analysis: 1. Imposition of Tax and Penalty under Section 129 of HPGST/CGST Act, 2017: The Proper Officer imposed a tax and penalty of Rs. 5,84,766/- on the Appellant under Section 129 of HPGST/CGST Act, 2017, read with Section 20 of IGST Act, 2017. The Appellant argued that the tax and penalty were imposed without proper notice or an opportunity to be heard, which violates the principles of natural justice. The judgment emphasized that granting an opportunity to be heard is a fundamental principle and not a mere formality. 2. Validity and Extension of the E-Way Bill: The e-way bill was initially valid until 28.06.2019 but was revalidated and extended until the midnight of 30.06.2019. The Proper Officer, however, failed to verify the extended validity and incorrectly noted that the e-way bill had expired on 12.05.2019. The judgment highlighted the procedural error and the fact that the vehicle was checked on 01.07.2019, a day after the e-way bill's extended validity had expired. 3. Alleged Violation of Natural Justice Principles: The Appellant contended that the notice issued by the Proper Officer directed the supplier and recipient to appear on the same date and time the vehicle was intercepted, effectively denying any opportunity to be heard. The judgment found this to be a clear violation of natural justice principles, emphasizing that the Proper Officer had passed the order without proper application of mind. 4. Determination of Tax Liability and Double Payment of IGST: The Appellant argued that IGST amounting to Rs. 2,92,383/- had already been paid on the transaction, leading to a double payment of IGST. The judgment found that the Proper Officer had not considered this aspect and failed to provide any reasoning for the additional tax and penalty imposed. 5. Procedural Lapses by the Proper Officer: The Proper Officer did not follow the due procedure as outlined in the Circular No. 41/18/2018-GST regarding the interception of conveyances, inspection of goods, and imposition of penalties. The judgment noted the failure to upload the physical verification report in Form GST MOV-04 and MOV-09 on the common portal, and the lack of proper opportunity for the Appellant to be heard. 6. Applicability of Supreme Court Judgment: The judgment referenced the Supreme Court ruling in M/s. Satyam Shivam Papers Pvt. Ltd. Vs. Asst. Commissioner (ST) and others, which held that tax/penalty under Section 129 of CGST/HPGST Act, 2017, cannot be imposed merely on the basis of the expiry of the e-way bill without proving the intention to evade tax. The judgment concluded that the Proper Officer failed to establish any willful or deliberate attempt by the Appellant to evade tax. Conclusion: The appeal was allowed, and the impugned order passed by the Proper Officer was quashed and set aside. A penalty of Rs. 15,000/- was imposed under Section 125 of HPGST/CGST Act, and the Respondent was directed to recover this amount and refund the balance to the Appellant. The judgment underscored the importance of adhering to procedural norms and ensuring that principles of natural justice are upheld.
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