2022 (9) TMI 94 - HC - GST

Seizure of goods alongwith vehicle - goods not covered by valid documents - expired E-way bill - petitioner did not avail of the opportunity to demonstrate, that the goods could not reach their destination before the expiry of the validity period of the e-way bill - HELD THAT - It is not in dispute, that against the subject goods, the tax stands paid, and that the impugned demand has been raised, only for the reason that at the time of interception, the e-way bill was not valid - This is not a case where the petitioner intended to evade tax. However, the impugned demand seeks not only the payment of tax, but also penalty. The petitioner needs to be given another chance to establish, as to why the subject goods did not reach their designated designation before the expiry of the e-way bill - matter is remanded to respondent no. 2, to take a fresh decision in the matter, after giving the petitioner due opportunity to produce relevant material/evidence to establish its case, that the delay in transporting the goods to their destination was on account of genuine reasons. Petition allowed by way of remand.

Summary

Issues:
Challenge to order sustaining tax and penalty demand based on expired e-way bill.

Analysis:
The High Court heard arguments on a writ petition challenging an order passed by the Office of Appellate Authority regarding a tax and penalty demand. The demand was upheld due to an expired e-way bill when the goods were intercepted during transportation from Guwahati to New Delhi. The e-way bill had expired by the time of interception, leading to the imposition of a 100% penalty. The petitioner did not request an extension for the journey's completion, resulting in the expired e-way bill issue. A show-cause notice was issued under Section 129(3) of the CGST Act, citing "goods not covered by valid documents" as the reason. The petitioner paid the demanded amount promptly to ensure timely delivery of goods, without contesting the expiry of the e-way bill. The Court noted that the tax was paid for the goods, and the demand was solely due to the invalid e-way bill at interception, not indicating tax evasion.

The Court found that the petitioner should be given another opportunity to explain the delay in goods reaching the destination before the e-way bill expiry. The impugned order was set aside, and the matter was remanded to the Appellate Authority for a fresh decision. The petitioner is to be given a chance to present evidence supporting genuine reasons for the delay. The Authority was directed to consider Section 126 of the CGST Act regarding rectifiable omissions or mistakes in documentation. A written notice will be issued to the petitioner for a hearing to present their case. The writ petition was disposed of with these directions.