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2024 (5) TMI 1122 - HC - GSTDetention of goods - e-way bill had expired 44 minutes ago - evasion of tax or not - HELD THAT - This Court considers it appropriate to reproduce the relevant portion of the judgment rendered by a Division Bench of the Hon ble Madhya Pradesh High Court in the case of M/s. Daya Shaker Singh vs. State of Madhya Pradesh 2022 (8) TMI 814 - MADHYA PRADESH HIGH COURT where it was held that In the instant case the delay of almost 4 30 hours before which E-way Bill stood expired appears to be bona fide and without establishing fraudulent intent and negligence on the part of petitioner the impugned notice/order could not have been passed. This Court further observes that the only fault lying with the petitioner was that the e-way bill with regard to the goods that were being transported had expired 44 minutes before the inspection took place due to the delay caused resulting from the tyre puncture for no fault of either of the petitioner or the driver of the truck thus it cannot be said that there existed an intention to evade tax or any fraudulent intention on part of the petitioner; the only issue lied with expiry of the e-way bill and not renewing the same. It is not in dispute that all taxes under the regime of CGST/ SGST were paid for. This Court further observes that the impugned notice was issued and the impugned order dated 01.03.2021 was passed under Section 129 (3) of the CGST Act 2017 the same being completely unjustified in the eye of law as the issue was not one of there not being an e-way bill but one of the existing e-way bill having expired during transit thus imposition of such a heavy penalty for a minor offence is unacceptable and the penalty imposed should have been as per Section 122 of the CGST Act 2017 of Rs. 10, 000/- as there is no apparent case of tax evasion. This Court is of the opinion that the impugned notice and the impugned orders dated 01.03.2021 and 24.05.2021 deserve to be quashed and set aside and the same are hereby quashed and set aside - Petition allowed in part.
Issues Involved:
1. Jurisdiction and validity of notice issued under Section 129(3) of the CGST Act, 2017. 2. Justification and legality of the order passed under Section 129(3) of the CGST Act, 2017. 3. Validity of the order of the Appellate Authority dated 24.05.2022. 4. Compliance with GST provisions and the relevance of the expired e-way bill. 5. Imposition of tax and penalty and the intent to evade tax. Issue-wise Detailed Analysis: 1. Jurisdiction and Validity of Notice Issued under Section 129(3) of the CGST Act, 2017: The petitioner challenged the notice issued under Section 129(3) of the CGST Act, 2017, arguing it was out of jurisdiction, ultra vires, arbitrary, unfair, and unreasoned. The petitioner contended that the delay in unloading the goods was due to circumstances beyond their control, such as a punctured tyre and unavailability of labor. The court observed that the e-way bill had expired 44 minutes before the inspection, and the delay was not intentional or fraudulent. Therefore, the notice issued was deemed unjustified. 2. Justification and Legality of the Order Passed under Section 129(3) of the CGST Act, 2017: The petitioner argued that the order imposing tax and penalty was arbitrary and not justified in law. The court referred to precedents, including the judgments of the Hon'ble Apex Court and various High Courts, which emphasized that mere expiration of the e-way bill without intent to evade tax does not justify detention and penalty. The court found that the imposition of a heavy penalty for a minor delay was unacceptable and should have been limited to Rs. 10,000/- under Section 122 of the CGST Act, 2017. 3. Validity of the Order of the Appellate Authority Dated 24.05.2022: The petitioner challenged the appellate order dated 24.05.2022, which upheld the initial order. The court observed that the appellate authority failed to consider the bona fide reasons for the delay and the lack of fraudulent intent. The court quashed the appellate order, aligning with the reasoning that the delay was not deliberate and the penalty imposed was disproportionate. 4. Compliance with GST Provisions and the Relevance of the Expired E-way Bill: The petitioner maintained that they had complied with GST provisions, including carrying the requisite documents and e-way bill, which had expired due to unavoidable delays. The court acknowledged that the petitioner had covered the majority of the distance and the delay was beyond their control. The court highlighted that the purpose of the e-way bill is to protect government revenue, and since the GST was already levied, no revenue loss occurred. 5. Imposition of Tax and Penalty and the Intent to Evade Tax: The respondents argued that the petitioner should have extended the e-way bill or parked the truck in their premises. The court, however, found no evidence of intent to evade tax or fraudulent conduct. The court cited precedents where similar delays were deemed bona fide and not grounds for heavy penalties. The court concluded that the penalty should be limited to Rs. 10,000/- as per Section 122 of the CGST Act, 2017, given the absence of tax evasion intent. Conclusion: The court quashed the impugned notice and orders dated 01.03.2021 and 24.05.2022, deeming them unjustified. The court directed the respondents to return the tax and penalty paid by the petitioner, deducting Rs. 10,000/- as per Section 122 of the CGST Act, 2017, within three months. The writ petition was partly allowed, and all pending applications were disposed of.
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