2019 (9) TMI 158 - HC - GST

Detention of goods alongwith vehicle - detention of goods on the ground of expiry of the E-WAY BILL - HELD THAT - We completely fail to appreciate that where the rules framed by the State of Bihar, itself enables a dealer to extend the validity period of the E-WAY BILLS on its expiry after updating the details in part B of form GST EWB-01, meaning thereby, the generation of the E-way bill on 26.4.2019 did not suffer infirmity and confirmed that it is the same vehicle which is transporting the goods; that there is no change in the nature of goods or the mode of conveyance and the generation had been done by the petitioner on 26.04.2019 i.e. before the detention order then in absence of any prescription in the Rule which debars a dealer from generating such E-WAY BILLS on its expiry, where is the default to invite a proceeding - We also fail to appreciate as to how after taking note of the generation on 26.04.2019 yet the Deputy Commissioner has proceeded to order for detention of the vehicle together with the goods loaded thereon on 27-04-2019 when admittedly whatsoever document that was missing on the date on which the proceedings had been initiated i.e. E-WAY BILLS, had since been generated on its validity period. This is the first lacuna which stares at the face of the respondent in the present proceeding. A cursory glance to the statutory provisions underlying under Section 129(1)(a) would confirm that it relates to goods on which tax is yet to be paid - the stipulations present in Section 129(1)(a) regulates the exercise in so far as it concerns non-tax paid goods and in which event the tax to be imposed is to be 100% with equal penalty thereon unless the goods being transported or found to be exempted from the tax. Once the assessing authority i.e. the Deputy Commissioner, State Tax has recorded in his proceedings on 26.04.2019 that the E-WAY BILL has been generated, meaning thereby the goods carried a valid E-WAY BILL, the proceedings ought to have been brought to a close, rather than to perpetuate the illegality as done in the present case. The conditional release of the goods together with the vehicle vide order passed on 17.5.2019 is confirmed and the petitioner is discharged from the liability of the security directed under the interim order - petition allowed.

Summary

Issues:
1. Validity of tax liability and penalty imposed under Bihar Goods and Services Tax Act, 2017.
2. Detention and seizure of goods due to expired E-WAY BILL.
3. Interpretation of statutory provisions under Section 68, Section 129, and Rule 138.
4. Compliance with E-WAY BILL regulations and validation process.
5. Application of penal provisions under Section 129 based on tax payment status of goods.

Analysis:

1. The judgment addresses the challenge against the order imposing tax liability and penalty under the Bihar Goods and Services Tax Act, 2017. The petitioner contested the order issued by the Deputy Commissioner of State Tax, Kishanganj Circle, for a tax liability of ?2,30,722/- with an equal penalty, totaling ?4,61,444/-. The petitioner argued that the order was in violation of statutory provisions, specifically Sections 68 and 129 of the Act. The court examined the facts of the case, focusing on the transportation of goods from Vaishali to Kishanganj, the generation of E-WAY BILLS, and subsequent detention of the vehicle.

2. The issue of detention and seizure of goods arose due to the expiration of the E-WAY BILL, despite the subsequent generation of a new E-WAY BILL by the petitioner. The Deputy Commissioner's order for detention of the vehicle and goods was based on the expired E-WAY BILL, leading to the imposition of tax liability and penalty. The court analyzed the timeline of events, including the generation of a new E-WAY BILL after the detention order, to determine the legality of the detention and subsequent proceedings.

3. The judgment delved into the interpretation of statutory provisions under Section 68, Section 129, and Rule 138 of the Act. It highlighted the obligations imposed on the person in charge of a conveyance carrying goods, the requirements for E-WAY BILLS, and the validity period specified under the rules. The court scrutinized the amendments to Rule 138 made by the State of Bihar, emphasizing the provisions allowing for the validation and extension of E-WAY BILLS under exceptional circumstances.

4. In examining the compliance with E-WAY BILL regulations and the validation process, the court considered the petitioner's actions in generating a new E-WAY BILL to rectify the expired one. The judgment assessed whether the generation of a new E-WAY BILL after the expiry of the original one complied with the rules and regulations governing the transportation of goods. The court scrutinized the validity of the E-WAY BILL in relation to the detention order and subsequent proceedings.

5. The application of penal provisions under Section 129 based on the tax payment status of the goods transported was a crucial aspect of the judgment. The court differentiated between Section 129(1)(a) applicable to non-tax paid goods and Section 129(1)(b) relevant to tax paid goods. The court emphasized that the penal provisions should align with the tax status of the goods, ensuring that the imposition of tax liability and penalty is commensurate with the tax payment status. The judgment highlighted the assessing authority's oversight in applying the correct provisions based on the tax status of the goods involved.

In conclusion, the court quashed the proceedings, including the tax liability and penalty imposed, based on the findings that the detention order was invalid due to the lawful generation of a new E-WAY BILL by the petitioner. The judgment emphasized the importance of adherence to statutory provisions, proper interpretation of rules, and alignment of penal provisions with the tax status of goods to ensure legal compliance in cases of goods transportation and taxation under the Bihar Goods and Services Tax Act, 2017.