2018 (7) TMI 1097 - HC - GST

Non-filing of part B of E-way bill - Inter and Intra State Supply of Goods or Services - Rule 138 and Section 68 of Central Goods and Service Tax Act, 2017 and M. P. Goods and Service Tax Act, 2017 - case of petitioner is that due to technical error, Part-B of the e-way bill cannot be updated - demand of GST with equal amount of penalty - petitioner placed reliance on the Division Bench decision of Allahabad High Court in the case of VSL Alloys (India) Pvt. Ltd. vs. State of UP & others 2018 (5) TMI 455 - ALLAHABAD HIGH COURT and submitted that in identical circumstances, the Division Bench found that there was no ill intention at the hands of the petitioner nor the petitioner was supposed to fill up Part-B giving all the details including the vehicle number before the goods are loaded in the vehicle, which is meant for transportation to the same to its end destination. Held that - In the case of VSL Alloys (India) Pvt. Ltd., the distance was within 50 kilometeres and, therefore, the petitioner therein was not under an obligation to fill the Part-B of the e-way bill and the Division Bench of the Allahabad High Court has rightly quashed the order. In the present case, the distance was more than 1200-1300 kilometers and it is mandatory for the petitioner to file the Part-B of the e-way bill giving all the details including the vehicle number before the goods are loaded in the vehicle. Thus, he admittedly violated the provisions of the Rules and Act of 2017 and, learned Authority rightly imposed the penalty and directed the petitioner to pay the same - demand upheld - petition has no merit and is dismissed.

Summary

Issues:
Violation of Section 68 r/w Rule 138 of the Central Goods and Service Tax Act, 2017 and M. P. Goods and Service Tax Act, 2017 leading to penalty imposition.

Detailed Analysis:

Issue 1: Violation of Section 68 and Rule 138
The petitioner, a Private Limited company engaged in transportation services, was found to have violated Section 68 of the Act which mandates inspection of goods in movement. The petitioner's vehicle was checked, revealing non-compliance with Rule 138(5) of the M. P. Goods and Service Tax Rules, 2017, regarding updating Part-B of the e-way bill on the common portal. This violation led to penalty imposition under Section 122 of the Act as the petitioner was transporting taxable goods without proper documentation.

Issue 2: Legal Provisions and Amendments
The State Government framed the M. P. Goods and Service Tax Rules, 2017, amended in 2017, making it mandatory for registered persons causing goods movement exceeding ?50,000 to upload e-way bill information with Part-A and Part-B. The failure to update Part-B of the e-way bill, as in the petitioner's case, constitutes a breach of Rule 138 and Section 68, justifying penalty imposition.

Issue 3: Adjudication and Penalty Imposition
Following due procedure, the Department initiated penalty proceedings under Section 129 of the Act due to the petitioner's non-compliance with statutory provisions. Despite the petitioner's explanation of a technical error hindering Part-B update, the penalty was upheld by the adjudicating Authority and the appellate body, emphasizing the mandatory nature of Part-B updating and dismissing claims of minor penalty applicability.

Issue 4: Grievance and Technical Error
The petitioner's assertion of a technical error for non-updating Part-B was rejected by the authority, citing the absence of raised grievances on the GST portal. The petitioner's status as a National Level Courier company employing experts in e-way bill uploading further negated claims of minor penalty applicability, given the substantial tax liability involved.

Issue 5: Judicial Precedent and Dismissal
The petitioner's reliance on a Division Bench decision of the Allahabad High Court in a similar case was dismissed, as the present case involved mandatory Part-B updating due to the substantial distance of goods transportation. The court upheld the penalty imposition, emphasizing the petitioner's violation of statutory provisions, leading to the dismissal of the writ petition.

In conclusion, the judgment upholds the penalty imposition on the petitioner for violating Section 68 r/w Rule 138 of the Acts, emphasizing the mandatory nature of e-way bill updating and dismissing claims of minor penalty applicability based on legal provisions and precedents.