2023 (3) TMI 290 - HC - GST

Misuse of E-way Bill - said goods being transported by a different conveyance - Levy of penalty under Section 129(3) of the West Bengal Goods and Services Tax Act, 2017 - failure to produce any document in support of the goods being transported by a different conveyance - HELD THAT - It appears that the adjudicating authority and the appellate authority applied their mind and on being satisfied that the goods were found to be transported without any e-way bill imposed penalty. The petitioner ought to appreciate that when an e-way bill is generated then the details of the goods to be transported, the place from where the shipment is made and the final destination are mentioned therein along with the details of the transporter and the vehicle number. Apart from the taxing purpose, the e-way bill is generated to identify the goods that are being transported, the place from where it is being transported, the final destination and the vehicle number by which the goods will be transported. The same implies that the goods cannot and ought not to be transferred from one vehicle to the other, far less, transported via a different vehicle, without obtaining a proper e-way bill. The moment the goods are unloaded from the vehicle in respect of which e-way bill was generated and loaded in a different vehicle without any e-way bill a statutory breach is committed, liable to be dealt with in accordance with the statute - There may be instances where, for illegal purpose, the goods are off loaded in the midway and taken to a different destination other than the one mentioned in the e-way bill. It is not for the authority to ascertain the reason as to why such action has been undertaken. There is no requirement in law to verify the reason for transporting goods in a vehicle without a proper e-way bill. In GULJAG INDUSTRIES VERSUS COMMERCIAL TAXES OFFICER 2007 (8) TMI 344 - SUPREME COURT the Court held that breach of statutory provision would attract levy of penalty and the officer does not have any authority to either reduce or waive the penalty. Petition dismissed.

Summary

Issues:
1. Imposition of penalty under Section 129(3) of the West Bengal Goods and Services Tax Act, 2017 for failure to produce documents supporting the movement of goods mentioned in the e-way bill.
2. Allegation of inadequate opportunity to defend against penalty imposition.
3. Argument for release of goods upon furnishing security instead of hefty penalty.
4. Dispute over the necessity of generating a fresh e-way bill when transferring goods to a different vehicle.
5. Interpretation of legal precedents cited by both parties.

Analysis:

1. Imposition of Penalty:
The petitioner challenged the penalty imposed under Section 129(3) of the Act due to failure to produce documents supporting the movement of goods mentioned in the e-way bill. The authorities seized the goods upon interception as the conveyance did not match the details in the e-way bill. The petitioner argued that a mechanical breakdown necessitated transferring the goods to a different vehicle, leading to the violation. However, the court held that such actions constituted a statutory breach, emphasizing the importance of adhering to e-way bill regulations to ensure tax compliance and tracking of goods.

2. Inadequate Opportunity for Defense:
The petitioner contended that they were not given a fair opportunity to defend against the penalty imposition, alleging a lack of proper consideration of their explanations. It was argued that the penalty determination occurred before a meaningful hearing, contrary to Section 129(4) of the Act. The court acknowledged the petitioner's claims but ultimately upheld the penalty, emphasizing the strict liability nature of such violations.

3. Release of Goods vs. Penalty:
The petitioner suggested that instead of imposing a hefty penalty, the authorities should have considered releasing the goods upon providing security as per Section 129(1)(c) of the Act. The argument was based on the specific nature of the goods meant for government use, with limited market value. However, the court found the penalty imposition justified under the circumstances of the case, rejecting the petitioner's plea for an alternative resolution.

4. Transfer of Goods to Different Vehicle:
The court addressed the necessity of generating a fresh e-way bill when transferring goods to a different vehicle. It emphasized that transferring goods without a proper e-way bill constitutes a statutory breach, regardless of the reasons behind such actions. The court highlighted the importance of e-way bills in tracking goods and ensuring tax compliance, underscoring the need for strict adherence to regulatory requirements.

5. Interpretation of Legal Precedents:
Both parties cited legal precedents to support their arguments. The court differentiated the facts of the present case from the cases referenced, emphasizing the applicability of strict penalty provisions in cases of statutory breaches. The court highlighted the precedence of upholding penalties for violations without requiring proof of intention or mens rea, as established in relevant judgments.

In conclusion, the court dismissed the writ petition, upholding the penalty imposed under Section 129(3) of the Act due to the statutory breach committed by transferring goods without a proper e-way bill. The judgment underscored the importance of regulatory compliance and the strict liability nature of such violations, ultimately denying the petitioner's plea for relief.