E-WAY BILL – SOME ISSUES

[Mr. M. GOVINDARAJAN]

E-way Bill

  It is pertinent to carry the required documents along with the E-way bill while in transport of the goods from one place to another place.  E-way bill is generated according to the provisions of CGST Act and the rules made there under.  The E-way bill carries its validity according to the distance covered during the transport.  The time of E-way bill may be extended and the corrections if required may be made.   However many a vehicle has been detained on the problem in E-way Bill.  In this article some of the issues faced by the consignors and consignees are discussed with reference to case laws.

Expired E-way Bill

  In ‘Ideal Movers Private Limited v. State Tax Officer (ENF), Roving Squad, Vellore’ – 2020 (1) TMI 1091 - MADRAS HIGH COURT,  the petitioner is a transporter and had been engaged to transport a consignment by Essar Steel India Limited from Kancheepuram District to Neel Metal Products at Krishnagiri District.  The consignment was accompanied by invoices.  An e-way bill had been generated on 12.01.2020 at 7.23 pm valid till 16.01.2020.  The said lorry was broken down on 13.01.2020 with major gear box damage near Vellore.  The defect was rectified on 16.01.2020 and the lorry proceeded to the destination.  The said lorry was intercepted at Vellore and was detained.

  The reason for detention is that there is no valid e-way bill.  The goods detention notice was issued by the Department and detention was made.  The petitioner contended that in this case there is only the lapsing of e-way bill and that too for bona fide reasons, and this offence may not be viewed very harshly.  The Department contended that section 129 is a complete code for the purpose of addressing all violations committed in transit leading to detention, seizure and release of goods and brings within its sweep all such contraventions, irrespective of the gravity of the violation itself.

  The High Court analyzed the provisions relating to E-way Bill.  The second proviso to Rule 138(10) permits a transporter to extend the validity of the expired e-way after updating the details in the relevant form and this benefit would be available in a case as at present.   The High Court held that the amount to be remitted would be ₹ 86,700 in terms of section 129(1)(b).    The Commissioner reduced the penalty to ₹ 5,000/-.  The High Court directed to release the consignments on payment of the tax and the penalty.

Typographical error in E-way bill

  In ‘Mahalakshmi Packages Manufacture v. ACST & E-cum-Proper Officer, Paonta Circle II – 2020 (3) TMI 722 - APPELLATE AUTHORITY, GST, HIMACHAL PRADESH, the appellant is a dealer importing paper board as raw material for manufacturing of corrugated boxes.  The respondent has intercepted the vehicle for inspection and found silly clerical mistake in the E-way bill and imposed huge tax and penalty for such import.  According to the Department the details of transport mentioned in the E-way bill is not matching actual vehicle in which goods were transported.  There is an error in two digits/characters of vehicle number.  The mismatch is due to typographical error by consignee while issuing tax invoice and generating E-way bill.  There is no dispute on quantity/quality of goods in question.  The petitioner relied on the circular No. 64/38/2018-GST, dated 14.09.2018 and State Government circular No. 12-25/2018-19-EXN-GST(575)-6009-6026, dated 13.03.2019 effective from 14.09.2018. 

  The above said circular in para 5 provides that in case a consignment of goods is accompanied with an invoice or any other specified document and also an E-way Bill, proceedings under section 129 may not be initiated inter alia in the following situations-

• spelling mistakes in the name of the consigner or the consignee but the GSTIN, wherever applicable, is correct;
• error in the pin code but the address of the consigner and the consignee mentioned is correct, subject to the condition that the error in pin code should not have the effect of increasing the validity period of the E-way bill;
• error in the address of the consignee to the extent that the locality and other details of the consignee are correct;
• error in one or two digits of the document number mentioned in E-way bill;
• error in four or six digits level of HSN where the first two digits of HSN are correct and the rate of tax is correct;
• error in one or two digits/characters of the vehicle number.

The Appellate Authority opined that there was no intention on the part of the appellant to evade tax.  The proper officer has imposed penalty in a mechanized manner and has ignored the guidelines issued by the above said circular.  Therefore the tax and penalty imposed is unsustainable.    The impugned order was set aside.  The Appellate Authority further directed to refund the deposit by the appellant of the tax and penalty imposed.

  In ‘Godrej Consumer Products Limited v. ACT & E-cum-Proper Officer, Baddi – II’ 2020 (2) TMI 857 - APPELLATE AUTHORITY, GST, HIMCHAL PRADESH, the department intercepted the vehicle and detained the vehicle alleging that the consignment was accompanied with expired e-way bill.  A tax and penalty were imposed on the appellant.  It is found that there is an error in entering the distance between the places of both the place of dispatch and place of receipt.  There distance between Puducherry to Himachal Pradesh is 2000 kilometers.   But in the E-way it has been wrongly entered as 20 kms.   By which the validity period has been calculated as one day instead of 20 days.  Therefore the E-way bill expired on the next day.    The Appellate Authority held that the mistake in entering distance in E-way Bill is typographical error to be treated as minor one in view of the CBIC circular dated 14.09.2018.  The Appellate Authority allowed the appeal filed by the appellant and directed the Department to refund the additional tax and penalty paid by the appellant.   The impugned order was set aside.

Change of vehicle

  In ‘Om Dutt v. ACST & E-cum-proper officer, Cen. Enforcement Zone, UNA’ – 2020 (3) TMI 729 - APPELLATE AUTHORITY, GST, HIMACHAL PRADESH, the vehicle in question was broken down and the vehicle has been changed for another vehicle.  The goods were moved in the new vehicle and moved to the destination.  Due to internet connectivity the E-way Bill was not updated.  The dealer carried the goods in the new vehicle with old E-way Bill generated on 05.11.2018 as the festival season i.e., Deepavali is falling on the next day and the supplier has to deliver the goods in time to the recipient who has to further deliver the two wheelers to different customers.  During the movement of goods, the vehicle was intercepted and tax and penalty equal to 100% of the tax payable on the goods were levied.  The same was deposited by the appellant and filed an appeal before the Appellate Authority against the said order.

  The Appellate Authority observed that there is no dispute regarding quantity of goods and further all documents were placed before the proper officer.  The E-way Bill shown to the proper officer relates to the previous vehicle which has faulted.  The only mistake the E-way Bill Part B was that the number of the vehicle in which the goods were transshipped had not been entered at the time of inspection of the vehicle.  The appellant updated E-way bill and the number of second vehicle was updated in Part B of the E-way Bill.  Despite this the respondent detained the vehicle and imposed tax and penalty to the tune of ₹ 1,43,432/-.  The appellant already declared the consignment on 05.11.2018 at 09:43 pm which makes it clear that there was no intention to evade tax.  The Appellate Authority observed that the respondent has imposed penalty in a mechanical manner and has ignored the corrected and updated E-way Bill.  Therefore the Appellate Authority held that the tax/penalty imposed by the respondent is unsustainable.  The Appellate Authority directed the respondent to refund the tax and penalty deposited by the appellant. 

Reasonable opportunity

  In ‘Bhushan Power & Steel Limited v. Assistant Commissioner of State Taxes & EX (Proper Officer), Shimla’ – 2020 (2) TMI 858 - APPELLATE AUTHORITY, GST, HIMACHAL PRADESH, the appellant supplied galvanized pipe to Shimla under the proper documents i.e., tax invoice, GR and E-way Bill with the validity up to 20.11.2018.  The goods reached at Chandigarh on 20.11.2018 and transshipment took places and new vehicles were arranged for further movement of goods towards Shimla and entry in the Part B of the E-way bill was made accordingly.  The vehicle was intercepted.  The respondent inspected the documents and found the E-way bill was expired on 20.11.2018 midnight.  The vehicle was detained.  There was no discrepancy either with regard to other documents accompanied the consignment or with the quantity of goods being transported. 

  The Appellate Authority observed that Rule 138 (10) provides that the validity of E-way Bill may be extended within 8 hours from the time of its expiry but in the instant case the vehicle was practically apprehended in almost 8 to 9 hours of the expiry of e-way bill, prima facie, it appears that the appellant has not been given reasonable opportunity to update E-way Bill Part A.  The Appellate Authority noted that the Part B of the E-Way Bill was duly filled which puts to rest on any doubts about the intention of the appellant to evade tax. The E-way bill is invalid only if Part B of E-way bill is not filled or a considerable time to update the Part A of E-way Bill has gone by.  In the opinion of the Appellate Authority the imposition of tax/penalty by the respondent is harsh and unsustainable.  The Appellate Authority allowed the appeal filed by the appellant.  Since the appellant has made minor procedural lapse as required to follow under Rule 138(10) a penalty of ₹ 1000/- is imposed.

Discussions to this article

[Muthukumar Muthunarasimhan]

Practically discussed the day to day difficulties faced by the trade and transporter.