2022 (5) TMI 1075 - HC - GST

Detention of goods alongwith the vehicle - breakdown of vehicle - non-extension of the validity of the e-way bill - intent to evade tax or not - according to the writ petitioner the vehicle transporting goods had broken down and on account of which, there was delay and there was no willful intention to evade payment of tax - HELD THAT - In the instant case, the bona fides of the writ petitioner has to be tested on the documents, which were available on record. Firstly, it is found that the tax invoice has been raised by Bhaskar Steel and Ferro Alloy Pvt. Ltd. dated 7th September, 2019. There is no dispute as regards the quantity and description of the goods. The said vendor had raised the eway bill dated 7th September, 2019 as the goods were to be despatched from SRMB Srijan Pvt. Ltd. to the writ petitioner, who had its registered office at Kolkata. The said e-way bill was valid upto 9th September, 2019 since the approximate distance was about 168 kilometers. The writ petitioner s case was that they are traders and they had a supply order from Om Dayal Educational and Research Society, which also has its registered office at Kolkata but, however the goods had to be shifted to a place in Durgapur. Therefore, the writ petitioner raised a second e-way bill on 7th September, 2019 and since the distance from SRMB Srijan Pvt. Ltd., Durgapur to the Delhi Public School, Durgapur was only 9 kilometers, the e-way bill was valid only for one day, i.e. 7th September, 2019 to 8th September, 2019 (midnight). The case has to be approached by considering the bona fides of the transaction as to whether the case warrants detention of the goods and collection of tax and penalty. Admittedly, the first e-way bill dated 7th September, 2019 was valid upto 9th September, 2019. Therefore, in the absence of second e-way bill, the tax authorities at Durgapur could not have intercepted or detained the vehicle. Therefore, the explanation offered by the respondent / writ petitioner was an acceptable explanation and a case cannot be made out that there was a deliberate and willful attempt on the part of the respondent / writ petitioner to evade payment of tax so as to justify invocation of the power under Section 129 of the Act. The appellant is directed to process the application for refund filed by the respondent on 7th March, 2022 and orders be passed thereon in terms of the direction issued by the learned writ Court within a period of two weeks from the date of receipt of the server copy of this judgment and order - Appeal dismissed - decided against Revenue.

Summary

Issues Involved:
- Challenge to order of demand of tax and penalty based on expired e-way bill during transportation of goods.
- Consideration of bona fides of the writ petitioner in detaining the goods and imposing tax and penalty.
- Justification of the relief granted by the learned single Bench and the subsequent appeal by the department.
- Examination of the documents and circumstances to determine the willful attempt to evade tax.

Analysis:

1. Challenge to Order of Demand of Tax and Penalty:
The appeal was filed by the department against the order dated 1st March, 2022, challenging the order passed by the Joint Commissioner. The respondent challenged the order of demand of tax and penalty issued by the Assistant Commissioner of State Tax. The learned single Bench found the detention of the vehicle and the demand of tax and penalty unjustified due to the expired e-way bill, leading to the disposal of the writ petition and setting aside of the orders in question. The department was aggrieved by this decision, leading to the current appeal.

2. Consideration of Bona Fides:
The respondent argued that there was no willful intention to evade payment of tax, citing a breakdown of the vehicle and the circumstances leading to the expired e-way bill. The learned single Bench accepted this argument, leading to the grant of relief to the respondent for refund of penalty and tax paid. The department contended that such arguments were not raised earlier and that the appellate authority's findings were not to be interfered with. However, the respondent's counsel presented documents supporting the bona fides of the writ petitioner's actions, including tax invoices and e-way bills, to justify the relief granted by the court.

3. Justification of Relief Granted:
After hearing arguments from both parties, the Court examined the documents on record to assess the bona fides of the transaction. The Court found that the first e-way bill was valid until the date of transportation, and in the absence of a second e-way bill, the interception and detention of the vehicle were not justified. The Court concluded that there was no deliberate attempt to evade tax, supporting the relief granted by the learned single Bench. The Court emphasized that the decision was based on the specific facts of the case and should not be considered a precedent.

4. Examination of Willful Attempt to Evade Tax:
The Court emphasized the importance of considering the bona fides of the respondent in determining whether there was a willful attempt to evade tax. By analyzing the documents and circumstances, the Court found that the respondent's explanation for the expired e-way bill was acceptable and did not indicate any deliberate or willful intention to evade tax. Consequently, the Court dismissed the appeal by the department and directed the processing of the respondent's refund application within a specified timeframe.

In conclusion, the judgment focused on the validity of the e-way bill, the bona fides of the respondent, and the absence of willful tax evasion, leading to the dismissal of the department's appeal and the affirmation of the relief granted to the respondent.