GOODS CANNOT BE TRANSPORTED IN DIFFERENT VEHICLE WITHOUT GENERATIG E-WAY BILL

[Mr. M. GOVINDARAJAN]

Rule 138 of the Central Goods and Services Tax Rules, 2017 provides the procedure for furnishing information to be furnished before the commencement of movement of goods and generation of E-Way bill.  The E-way bill will be valid for a period according to the distance that is to be covered in the transportation as stipulated in Rule 138(10).  During the course of transportation the vehicle carrying the goods may get repaired or meet accident.  In such a situation the said vehicle cannot be used for the transportation of the goods.  In this case the goods in the said vehicle may be transferred to another vehicle.  Even though the E-way bill is valid at the time of transferring the goods to the new vehicle, fresh E-Way bill is to be generated or update the details of the conveyance in the E-Way bill.  Goods cannot be transported without generation of E-Way Bill.  Like that goods cannot be transported in different vehicle as discussed above without generating E-Way Bill.  This amounts to contravention of the provisions of the Rules and liable to penalty. 

In ASIAN SWITCHGEAR PRIVATE LIMITED VERSUS STATE TAX OFFICER, BUREAU OF INVESTIGATION, NORTH BENGAL HEADQUARTERS & ORS. - 2023 (3) TMI 290 - CALCUTTA HIGH COURT, the petitioner loaded the electrical switches for transportation and for this purpose E-Way Bill was generated.  During the course of the journey the vehicle suffered a mechanical snag.  Therefore the person in charge of the vehicle had to arrange a different vehicle for transporting the said goods.  The said vehicle was intercepted on 19.02.2022.   The second conveyance was not mentioned in the E-way Bill.  The person in charge of the vehicle also failed to produce evidence for the transfer of goods from one vehicle to another vehicle.  The goods were seized by the Authorities.  The goods were released on payment of penalty under Section 129(3) of West Bengal Goods and Services Tax Act, 2017 (‘Act’ for short). 

The petitioner filed an appeal against the order of Adjudicating Authority before the Appellate Authority.  The Appellate Authority confirmed the order passed by the Adjudicating Authority and dismissed the appeal filed by the petitioner.  Against this order the petitioner filed a writ petition before the High Court in the absence of GST Tribunal.

The petitioner submitted the following before the High Court-

• The E-way bill in question was generated on 10.06.2022 and the same was valid up to 21.06.2022. 
• The vehicle number against which the E-way bill was generated was specifically mentioned therein.
• There is no scope of selling the goods in the open market since the goods are manufactured to the Arunachal Pradesh Government.
• Had the initial vehicle not suffered a mechanical snag, the said vehicle would have curtained reached the final destination within the validity period of the E-way bill.
• The breakdown of the vehicle is unforeseen and beyond the control of the petitioner. 
• There was no intention to evade tax.
• The Authority did not give proper opportunity to defend the case and imposed penalty in a mechanical and routine manner without appreciating the genuine difficulty on the part of the petitioner for not being able to transport the goods in the vehicle against which the E-Way Bill was generated.
• The E-Way bill was valid at the time of interception of the vehicle and therefore no penalty under section 129(3) ought not to have been imposed. 
• The petitioner was not given an opportunity even at the appeal stage.
• The reply given by the petitioner to the show cause notice was not considered properly and the same was an empty formality, mechanical in nature.
• The penalty was determined prior to the opportunity of hearing given to the petitioner which is contrary to the provisions of Section 129(4) of the Act.
• The Authorities ought to have released the goods upon furnishing a security under Section 129(1) (c) of the Act.
• The Authorities ought to have appreciated the reason for temporary shipment of the goods via a different conveyance and ought not to have imposed penalty even after detecting that the description of the goods mentioned in the E-way bill matches the goods on interception.
• The petitioner would not have gained anything by transporting the goods by a different conveyance as the goods cannot be sold over the counter in an open market.
• The goods are specifically meant for government use and therefore the imposition of penalty is unwarranted.

The respondents submitted the following before the High Court-

• The conduct of the petitioner in transporting the goods in a vehicle without a proper E-way bill is in contravention of the Act.
• There is no proper E-Way bill at the time of the interception of the vehicle.
• The said action is impermissible in law and therefore the petitioner has rightly been imposed penalty.
• Penalty is attracted as soon as there is contravention of statutory obligations.
• The intention of the parties committing such violation is wholly irrelevant.

The High Court considered the submissions put forth by the parties to the present writ petition.  The High Court observed that the Adjudicating Authority and the Appellate Authority applied their mind.  On being satisfied that the goods were found to be transported in the vehicle without proper E-Way bill the penalty was imposed by the Adjudicating Authority on the petitioner. 

The High Court further observed that the purpose, apart from the taxing purpose,   the E-Way bill is generated to identify the goods that are being transported, the place from where it is being transported, the final destination and the vehicle number by which the goods will be transported.  The same implies that the goods cannot be transferred tom one vehicle to another transported via a different vehicle without obtaining the proper E-Way bill.

If the above said procedure is not followed by the transporter it will be difficult for the authority to keep track of the goods that are being transported and whether the statutory charges have been paid for such transportation.  Though the petitioner contended that there was no other alternative but to transfer the goods to a different vehicle for transporting the same to the consignee, but the same ought to have been done only after generating a fresh E-Way Bill.

The High Court further observed that there may be instances where, for illegal purposes, the goods are off loaded in the midway and taken to a different destination other than the one mentioned in the E-way bill.  It is not for the authority to ascertain the reason as to why such action has been undertaken.  There is no requirement in law to verify the reason for transporting goods in a vehicle without a proper E-way bill.  The petitioner also admitted that the vehicle, in which goods transferred for being transported allegedly to the pre-recorded destination, did not have an E-way bill. 

The High Court held that the moment the goods are unloaded from the vehicle in respect of which E-Way bill was generated and loaded in a different vehicle without any e-way bill a statutory breach is committed and liable to be dealt with in accordance with the provisions of law.  The provisions of Section 129 of the Act will be attracted in such a situation and has been rightly invoked by the Authority.  The High Court dismissed the petition.