2024 (5) TMI 114 - HC - GST

Levy of penalty @200% - e-way bill which was generated by the appellant had expired and at the time when the vehicle was intercepted four days had lapsed - intent to evade to tax or not - HELD THAT - In the instant case, it is found that the order of adjudicating authority does not deal with the specific submission made by the appellant in the reply dated 13.09.2022 to the show cause notice. In other words, no reasons have been set out to record satisfaction of the authority that it is a fit case for imposition of penalty. Further, the adjudicating authority did not reject the stand taken by the appellant in their reply dated 13.09.2022. In the absence of any allegation that there is an intention to evade payment of taxes and in the absence of any adverse inference drawn pursuant to the physical verification except that e-way bill had expired, the court if of the view that some lenience can be shown to the appellant. However, the conduct of the appellant in not extending the e-way bill for four days after its expiry cannot be absolutely condoned. A transporter/owner of the goods is bound to carry certain documents as mentioned in the Act which are to accompany the goods. In the instant case, prior to the movement of the goods e-way bill was generated in which the tax invoice number was duly incorporated proof of payment of tax has also been established and e-way bill was valid till 05.09.2022 and mistake committed by the appellant is not extending the e-way bill after the expiry despite such liberty being granted under the Rules. The appellate authority in fact has accepted the contention of the appellant that the penalty amount has been computed on a higher value than the invoice value without proper evidence and reason. Cnsidering the totality of the circumstances and the peculiar facts and circumstances of the case, the court is inclined to grant some indulgence to the appellant but will not completely exonerate the appellant - Considering the peculiarity of the facts, the appellant is liable to pay Rs. 1,00,000/- - appeal allowed in part.

Summary

Issues Involved:
1. Validity of the e-way bill.
2. Imposition of penalty u/s 129 of the WBGST Act.
3. Intention to evade tax (mens rea).
4. Jurisdictional error.

Summary:

Validity of the e-way bill:
The appellant challenged the order of the appellate authority under the West Bengal Goods and Services Tax Act, 2017, which dismissed the appeal against the adjudicating authority's order imposing a penalty due to the expiry of the e-way bill. The appellant claimed the vehicle suffered breakdowns, but failed to provide supporting documents in the writ petition.

Imposition of penalty u/s 129 of the WBGST Act:
The State Tax Officer detained the vehicle for having an expired e-way bill and issued a show-cause notice proposing a 200% penalty. The appellant paid the tax and penalty for the release of goods but contested the imposition of penalty. The appellate authority dismissed the appeal, noting the appellant did not attempt to extend the e-way bill validity.

Intention to evade tax (mens rea):
The court examined whether there was an intention to evade tax. The appellant argued that there was no intent to evade tax, supported by the fact that the e-way bill was initially valid and the breakdowns were beyond their control. The court noted that the authorities did not find any other discrepancies or evidence of tax evasion.

Jurisdictional error:
The appellant also raised a jurisdictional error, claiming the officer who passed the order was not the proper authority. The court found that the adjudicating authority did not address the appellant's specific submissions or provide reasons for imposing the penalty.

Conclusion:
The court concluded that while the appellant should have extended the e-way bill, the imposition of a 200% penalty was harsh given the circumstances. The court reduced the penalty to Rs. 1,00,000/- and ordered the balance to be refunded to the appellant within three months, without interest. The appeal was partly allowed.