2021 (2) TMI 592 - HC - GST

Detention of goods alongwith the vehicle - expired E-way bill - goods transported for a distances up to 50 kms only, within the State - applicability of proviso clause to Rule 138 of the Central Goods and Services Rules, 2017, where there was no necessity to update the e-way bill, for such distance - HELD THAT - Perusal of the order at Ext.P7 detaining the goods makes it clear that the goods were detained while in transit because, validity of the e-way bill had expired and it was not re-validated within the prescribed time. As a consequence, notice under Section 129(3) of the GST Act came to be issued with a direction to the petitioner authority to appear before the respondent authority on 24.01.2021 for showing cause as to why necessary action as contemplated under Section 129 of the GST Act should not be taken. Considering the fact that goods were being transported from one State, ie, Karnataka to another State ie, Kerala, Rule 138(5) relied by the petitioner has no application to the fact situation in the instant case. Rule 138(8) of the said Rules makes copy of the e-way bill mandatory during the course of conveyance of goods. The scheme 129 of the GST Act 2017 makes it clear that the petitioner is having opportunity of hearing before the authority under the GST Act in the wake of receipt of notice under Section 129(3) by him. Petition dismissed.

Summary

Issues:

1. Validity of e-way bill for inter-State transportation.
2. Detention of goods due to expired e-way bill.
3. Interpretation of Rule 138(8) of GST Rules, 2017.
4. Maintainability of the petition.

Analysis:

1. The petitioner, a partnership firm, purchased Control Panels from a supplier in Bangalore and transported them to Kerala via a logistics company. The goods were detained by GST authorities on 15.01.2021 due to an expired e-way bill, leading to the issuance of a detention order under Section 129(3) of the GST Act. The petitioner argued that as the transportation distance was within 50 kms in Kerala, there was no need to update the e-way bill, citing the proviso clause to Rule 138 of the Central Goods and Services Rules, 2017. However, the court found that since the goods were being transported inter-State, the provision cited by the petitioner did not apply, and Rule 138(8) mandated the presence of a valid e-way bill during transportation.

2. The detention of goods was justified based on the expired e-way bill and failure to re-validate it within the prescribed time. The detention order required the petitioner to appear before the GST authorities to show cause as to why action under Section 129 of the GST Act should not be taken. The court emphasized that the petitioner had the opportunity for a hearing before the GST authority as per the provisions of Section 129(3) of the Act.

3. The learned Government Pleader argued that the petition was not maintainable as Form GST MOV-02 had already been issued, referring to a previous judgment of the court. Additionally, Rule 138(8) of the GST Rules, 2017 was cited to support the requirement for goods to be accompanied by a valid e-way bill during transportation. The court considered these arguments and the materials presented before it, ultimately rejecting the petition on the grounds that the petitioner's interpretation of the rules was incorrect and the detention of goods was justified.

4. In conclusion, the court found that the petitioner's argument regarding the necessity of updating the e-way bill for inter-State transportation was unfounded. The court upheld the detention of goods due to the expired e-way bill and the subsequent show cause notice issued under Section 129(3) of the GST Act. Therefore, the petition was deemed devoid of merit and rejected by the court.