2023 (1) TMI 1026 - HC - GST

E-way Bill - Period of limitation for expiry of E-way Bill - Constitutional validity of rule 138(10) of the Central Goods and Services Tax Rules 2017 / Gujarat Goods and Services Tax Rules 2017 - restriction imposed on validity period of the e- way bill in terms of distance to be travelled in a day - HELD THAT - The respondent had challenged the authority of the respondent demanding the tax and penalty under Section 129(3) of the Central Goods Services Tax Act 2017 where the goods which were to be delivered on or before 17.10.2022 could not be delivered in time and on 19.10.2022 when inspected some of the e-Way bill numbers had shown expired. The entire truck along with the goods had been seized on account of expiration of the e-Way bill. Therefore the Court had after a detailed consideration held that e-Way bill had expired 41 hours before and the release of goods of conveyance and transit through the authority concerned. In the instant case also the goods of the said vehicle has been detained at 6 05 p.m. at Amirgadh on 27.9.2018 after about expiry of 48 years. This case is squarely covered by the decision of this Court which has not been further challenged and even otherwise from the facts which are robust in nature it can be gathered that there does not appear to be any ill-intent on the part of the petitioner to use the expired e-Way bill. The company is situated at Howrah West Bengal and the place of delivery was Jamnagar Gujarat and in transit this e-Way bill has expired. Petition allowed.

Summary

Issues Involved:
1. Constitutional validity of Rule 138(10) of the CGST Rules, 2017.
2. Breach of principles of natural justice under Section 129(3) of the CGST Act.
3. Imposition of penalty under Section 129(1) versus Section 122(1)(xiv) of the CGST Act.
4. Application of Section 73 and Section 74 of the CGST Act.
5. Jurisdictional authority under Section 129(3) of the CGST Act.
6. Detention and seizure of goods due to expired e-Way bill.

Detailed Analysis:

1. Constitutional Validity of Rule 138(10) of the CGST Rules, 2017:
Initially, the petition challenged the constitutional validity of Rule 138(10) of the CGST Rules, 2017, arguing that it was unconstitutional and violative of Articles 14, 19(1)(g), and 301 of the Constitution of India. However, during the hearing on 13.10.2022, the petitioners withdrew this challenge, and thus, the court did not consider this issue further.

2. Breach of Principles of Natural Justice under Section 129(3) of the CGST Act:
The petitioner argued that the impugned order under Section 129(3) of the CGST Act was passed without waiting for the scheduled hearing date, thereby breaching the principles of natural justice. The court noted that Section 129(4) mandates giving the concerned person an opportunity of being heard before determining any tax, interest, or penalty. The premature passing of the order without a hearing was deemed a violation of this provision.

3. Imposition of Penalty under Section 129(1) versus Section 122(1)(xiv) of the CGST Act:
The petitioner contended that the penalty should have been imposed under Section 122(1)(xiv), which prescribes a penalty for transporting goods without the necessary documents, rather than under Section 129(1). The court did not specifically address this contention in its final judgment, as the primary focus was on the procedural breaches and the expired e-Way bill issue.

4. Application of Section 73 and Section 74 of the CGST Act:
The petitioner referenced Sections 73 and 74, which provide for the determination of tax not paid or short paid and the associated penalties, arguing that they had paid the tax and penalty within the stipulated time and should be entitled to the benefits under these sections. The court recognized the petitioner's compliance but focused more on the procedural lapses and the expired e-Way bill issue.

5. Jurisdictional Authority under Section 129(3) of the CGST Act:
The petitioner argued that the impugned order was passed by the State Tax Officer, who was not authorized under Section 129(3) of the CGST Act. The court did not elaborate on this jurisdictional issue in its final judgment, as the case was resolved on other grounds.

6. Detention and Seizure of Goods Due to Expired e-Way Bill:
The court extensively discussed the issue of the expired e-Way bill, referencing the case of Shree Govind Alloys Pvt. Ltd. v. State of Gujarat, where the court held that the expiration of the e-Way bill during transit could not justify the detention and seizure of goods. In the present case, the e-Way bill had expired 48 hours before the detention, and there was no indication of fraudulent intent. The court concluded that the detention and seizure were unjustified and quashed the impugned order and the notice issued under Section 129(3).

Conclusion:
The petition was allowed, quashing the impugned order dated 28.09.2018, the detention order, and the notice under Section 129(3). The court ordered the refund of the penalty amount with interest within eight weeks, thereby providing relief to the petitioner. The rule was made absolute to the extent specified in the judgment.