E-WAY BILL – SOME ISSUES

[Mr. M. GOVINDARAJAN]

E-Way Bill

E-way bill is an electronic document generated on the GST portal evidencing movement of goods. E-way bill is a mechanism to ensure that goods being transported comply with the GST Law and is an effective tool to track movement of goods and check tax evasion. It has two Components-Part A comprising of details of GSTIN of recipient, place of delivery (PIN Code), invoice or challan number and date, value of goods, HSN code, transport document number (Goods Receipt Number or Railway Receipt Number or Airway Bill Number or Bill of Lading Number) and reasons for transportation; and Part B comprising of transporter details (Vehicle number).

As per Rule 138 of the CGST Rules, 2017, every registered person who causes movement of goods of consignment value more than Rs. 50000/- is required to furnish above mentioned information in part A of e-way bill. The part B containing transport details helps in generation of e-way bill.

Generation of E-Way Bill

E-way bill is to be generated by the consignor or consignee himself if the transportation is being done in own/hired conveyance or by railways by air or by Vessel. If the goods are handed over to a transporter for transportation by road, E-way bill is to be generated by the Transporter. Where neither the consignor nor consignee generates the e-way bill and the value of goods is more than Rs.50,000/- it shall be the responsibility of the transporter to generate it.

If under circumstances of an exceptional nature, the goods cannot be transported within the validity period of the e-way bill, the transporter may generate another e-way bill after updating the details in Part B of Form GST EWB-01.

Seizure and detention

The vehicle that is found to be transporting the goods without an Eway bill can be detained or seized and would be released only on payment of appropriate tax and penalty as specified by the officer. 

Case laws in regard to issues in E-Way Bill

Change of name in E-Way Bill

In SATGURU IMPEX VERSUS STATE OF TRIPURA AND OTHERS  - 2022 (10) TMI 133 - TRIPURA HIGH COURT the petitioner made mistakes in the E-way bill in the names of buyers and sellers.  In place of buyer’s name seller name was filled and in place of seller’s name buyer name was filled.  This mistake was rectified by generating fresh E-way bill.  The Department seized the vehicle and goods due to the above said mistake.  The High Court held that there is no dispute that the parties are genuine, nor is there any dispute that the original E-way Bill contained an error.  Where the error is rectified and corrected E-way Bill was produced, it would be appropriate for the Revenue authorities to act sensibly in the manner and proceed.  Causing unnecessary impediment to the free flow of goods and vehicles does cause an unnecessary hindrance to the economy of the State.

Authorities to verify E-Way Bill

Once the driver of the vehicle produces a valid E-way Bill, the authorities concerned are responsible to honor the same and if any fault is found therein, action can be taken under the statute.  In PROGRESSIVE ENTERPRISE VERSUS THE STATE OF TRIPURA AND OTHERS - 2022 (5) TMI 1419 - TRIPURA HIGH COURT the High Court held that the vehicle in question and the driver concerned produced the E-way Bill prior to seeking permission to leave the State of Tripura and the E-way Bill produced is the new E-Way Bill.  Therefore it was obligatory on the part of the statutory authorities to go through the same and if the same found in order to permit the transport of the machinery and/or consignment concerned.

Clerical error

In TIRTHAMOYEE ALUMINIUM PRODUCTS VERSUS STATE OF TRIPURA, CHIEF COMMISSIONER OF STATE TAX, INSPECTOR OF STATE TAX GOVERNMENT OF TRIPURA, HINDALCO INDUSTRIES LTD., UNION OF INDIA - 2021 (3) TMI 540 - TRIPURA HIGH COURT due to  a clerical error in the E-way Bill the distance from the place of origin to the destination was shown as 470 Kms instead of 1470 kms which is the actual distance.  The High Court held that it is a minor mistake.  The High Court did not find it is a fit case where the Court should relegate the petitioner to appeal remedy, more importantly, when the order passed by the Inspector of State Tax suffered from gross irregularity of no hearing been granted to the petitioner.  The said authority issued a notice of personal hearing making it returnable on 19.11.2018, long before that on 05.11.2018 i.e. the date on which he issued the notice, he passed a separate order confirming the demand of tax with penalty.  This was wholly impermissible since he does not treat this order as a tentative demand but as a mandatory demand.

State E-way Bill

In case of inter-State transactions Integrated tax is to be recovered.  In such cases the State E-way Bill is not required.  Without State E-way bill the goods can be transferred from one State to another State.  In M/S BIHARILAL CHHATERPAL THRU PROP. RAMESH KUMAR GUPTA VERSUS STATE OF U.P. THRU PRIN. SECY. TAX AND REGISTRATION AND ORS. - 2021 (11) TMI 720 - ALLAHABAD HIGH COURT the High Court held that it being an Inter-State transfer of goods there was no requirement of carrying the UP State E-way bill.  The insistence by the State authorities that the petitioner’s vehicle was not carrying the UP E-way Bill is without any factual and legal basis.  The integrated tax @ 18% has already been paid by the petitioner.  The goods were being transported along with the tax invoice etc.  Therefore it was not a fraudulent transaction.  The High Court directed the Authorities to refund the amount deposited by the petitioners as tax and penalty under UPGST Act, 2017. 

Expiry of E-way Bill

In M/S DAYA SHANKER SINGH THROUGH DAYA SHANKER SINGH PROPRIETOR DINDORI (MADHYA PRADESH) VERSUS STATE OF MADHYA PRADESH THROUGH ITS SECRETARY MINISTRY OF FINANCE VALLABH BHAWAN BHOPAL (MADHYA PRADESH) , COMMISSIONER, STATE GST MOTI BUNGALOW, ASSISTANT COMMISSIONER, STATE GST STATE GST, CIRCLE II, JABALPUR (MADHYA PRADESH) - 2022 (8) TMI 814 - MADHYA PRADESH HIGH COURT the High Court observed that the E-way Bill of the petitioner was valid up to 19.05.2022 and truck was intercepted on 20.05.2022 at 04.35 A.M.,  The petitioner contended that there was no element of tax evasion, fraudulent intent and negligence on the part of the petitioner which was not rebutted by the Authorities.  The Authorities could not establish that there exists any element of evasion of tax, fraudulent intent or negligence on the part of the petitioner.  The High Court held that in this backdrop, the impugned notice/order could not have been passed.

In ASSISTANT COMMISSIONER (ST) & ORS. VERSUS M/S. SATYAM SHIVAM PAPERS PVT. LIMITED & ANR. - 2022 (1) TMI 954 - SC ORDER, the respondent had made an intra-State supply of paper to Ayyappa Stationery and General Stores.  The respondent generated an E-way Bill.  The goods were delivered to a transporter for making delivery to the consignee by an auto.  Due to Anti CAA protest, the traffic was blocked.  Therefore the driver could not make the delivery, next day being Sunday the driver delivered on the next working day.

Considering that there was no material before the appellant to come to the conclusion that there was evasion of tax by the registered person merely on account of lapsing of time mentioned in the E-way bill because even the appellant did not say that there was any evidence of attempt to sell the goods to somebody else before delivery.  The High Court held that on account of non extension of the validity of the E-way bill by the registered person or the auto driver, no presumption could be drawn that there was an intention to evade tax.  The Department was awarded penalty to the tune of Rs.69,000/- and imposed cost of Rs.10,000/-

Wrong declaration

In M/S. SMART ROOFING PRIVATE LIMITED VERSUS THE STATE TAX OFFICER (INT) , MADURAI  2022 (4) TMI 241 - MADRAS HIGH COURT the petitioner had consigned goods from its main place of business to its additional place of business somewhere else in Madurai.  In the E-way Bill the petitioner declared the additional place of business.  The consignment along with the lorry was detained.   A show cause notice was issued for which the petitioner filed reply.  However the Authority imposed penalty totaling to Rs.5,00,774/-.  Therefore the petitioner filed the present petition before the High Court.

The petitioner contended that there is no intention to evade tax.  The petitioner has taken step to add the additional place in the Registration certificate.  Therefore the petitioner contended that the imposition of penalty is unwarranted.  The High Court justified the action of the Department in detaining the goods and vehicle for the wrongful declaration.  The High Court observed that the consignor and consignee are one and the same entity, namely, Head office and branch office.  The petitioner included the new place of business altering the GST registration which has also been amended.  The High Court held that this is only a technical breach committed by the petitioner and there is no intention to evade tax.  The High Court directed the Authorities to release the vehicle and the consignment to the petitioner.