2020 (2) TMI 858 - Commissioner - GST

Release of seized goods alongwith the vehicle - E-way Bill found with expired validity - compliance with section 67 of HP GST Act, 2017 and Section 129 of CGST/HPGST, Act, 2017 - willful default or any attempt to evade tax, present or not - HELD THAT - In the instant appeal cases the goods were consigned from Thelkoloi, Odisha to Anni, Kullu, Himachal Pradesh and travelled a distance of around 2000 kilometers. The goods were accompanied by proper documents transshipped into another vehicle at Chandigarh and the vehicle no. was updated by the appellant and e-way bill was valid at the time of transshipment of the vehicle on 20.11.2018 The validity of the e-way bill expired on midnight of 20.11 2018 and the vehicle was inspected and detained by the respondent at early morning on 21.11.2018. The vehicle was stationary and parked by the road side and driver was called on telephonically and proceedings were initiated u/s 129(1) for expiry of validity of e-way bill. There was no discrepancies either with regard to other documents accompanied the consignment or with the quantity of goods being transported. Rule 138(10) says that validity of e-way bill may be extended within 8 hours from the time of its expiry but in the instant cases the vehicle was practically apprehended in almost 08 to 09 hours of the expiry of the e-way bill, prima facie it appears that, the appellant has been not given reasonable opportunity to update the Part-A of e-way bill. It was noted that 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 non-furnishing of information in Part-B 01 of FORM GST EWB-01 amounts to the e-way bill becoming the not a valid document. It appears that 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 - Similarly, the para no. 5 of the circular says in case a consignment of goods is accompanied with an invoice or any other specify document and also an e-way bill, proceeding u/s 129 of the GST Act may not be initiated. Therefore, imposition of tax/ penalty by the respondent is harsh and unsustainable. Since the appellant has made minor procedural laps as required to follow under rule 138(10) therefore a penalty of Rs One thousand only (Rs- 1000/- IGST Act ) in each case is imposed on the tax payer under section 125 under the CGST/ HPGST Act 2017 in accordance to CBIC Circular No. 64/38/2018-GST, dated 14th Sep 2018 and the State Circular no. dated 13th March 2019 and may be recovered accordingly - appeal allowed.

Summary

Issues Involved:

1. Legality of additional demand and penalty imposed by the Assistant Commissioner of State Taxes & Excise.
2. Compliance with GST provisions, particularly Section 67 of HP GST Act, 2017, and Section 129 of CGST/HPGST Act, 2017.
3. Validity and implications of expired E-way bills.
4. Intent to evade tax and procedural lapses.
5. Application of Section 129 and Section 130 of the CGST/HPGST Act.
6. Relevance of Kerala High Court judgment and CBIC Circulars.
7. Justification of the tax and penalty imposed.

Issue-wise Detailed Analysis:

1. Legality of Additional Demand and Penalty:
The appellant contested the order dated 21-11-2018 by the Assistant Commissioner, which created additional demands of ?3,80,272/-, ?3,61,778/-, and ?2,85,506/- in three separate appeals. The appellant argued that the order was "illegal, arbitrary, and unjustified."

2. Compliance with GST Provisions:
The appellant claimed compliance with all GST provisions, including Section 67 of HP GST Act, 2017, and Section 129 of CGST/HPGST Act, 2017. They argued that all necessary documents, including a valid E-way bill, were generated and that the delay in reaching the destination was beyond their control.

3. Validity and Implications of Expired E-way Bills:
The goods were consigned from Odisha to Himachal Pradesh with E-way bills valid until 20-11-2018. The vehicles were intercepted on 21-11-2018 with expired E-way bills. The appellant contended that the delay was due to the festive season and that the majority of the distance had already been covered.

4. Intent to Evade Tax and Procedural Lapses:
The appellant argued that there was no intent to evade tax, as the goods were for a government undertaking, and all transactions were transparent. They cited the Kerala High Court judgment in WP(C) 196 of 2018, which states that detention under Section 129 can only occur when the ingredients of Section 130 are present, indicating an intent to evade tax.

5. Application of Section 129 and Section 130 of the CGST/HPGST Act:
The respondent argued that the expired E-way bill implied no valid E-way bill, thus contravening Section 68 read with Rule 138 of the GST Act. They contended that the detention and penalty were justified under Section 129. However, the appellant argued that the procedural lapse did not indicate an intent to evade tax.

6. Relevance of Kerala High Court Judgment and CBIC Circulars:
The appellant relied on the Kerala High Court judgment, which clarified that mere procedural infractions do not justify detention under Section 129. The CBIC Circular No. 64/38/2018-GST and the Himachal Pradesh circular dated 13.03.2019 were also cited, emphasizing that non-furnishing of Part-B information makes the E-way bill invalid, but reasonable time should be given to update it.

7. Justification of the Tax and Penalty Imposed:
The judgment noted that the vehicle was intercepted within 8-9 hours of the E-way bill's expiry, and the appellant was not given reasonable time to update it. The circulars mentioned that proceedings under Section 129 should not be initiated if the consignment is accompanied by valid documents, including an E-way bill.

Conclusion:
The appeals were accepted, and the orders passed by the Assistant Commissioner were set aside. The judgment imposed a nominal penalty of ?1,000/- under Section 125 of the CGST/HPGST Act, 2017, for minor procedural lapses. The tax and penalty initially imposed were deemed harsh and unsustainable. The judgment emphasized the need for reasonable opportunity to update E-way bills and the absence of intent to evade tax.