2023 (6) TMI 359 - HC - GST

Levy of penalty at the rate of 200% - expired E-way bill - applicability of Circular No.10/2019 dated 31.05.2019 - HELD THAT - Circular dated 24.02.23 has amended paragraph 9 of Circular dated 31.05.2019 and sets out the position prescribed and prevailing as on date in regard to circumstances where nil/reduced penalty of Rs. 500 may be levied for violations committed in transit of consignments. Paragraph number 10 of Circular No.10 of 2019 has been left untouched and would thus still be available in those specific circumstances - However, in this case, there is one distinguishing and supervening factor. The impugned order refers to a supporting document provided by the transporter and placed at page 101 of the compilation accompanying the writ affidavit containing the date 06.03.2023 in the column 'njjp'. However, the same document has been produced by the Department wherein the field 'njjp' is blank. The petitioner has no explanation to offer in regard to this discrepancy. The above position also constitutes a question of fact and it is thus appropriate, that the appellate authority look into the matter, specifically the genuineness of the explanation put forth by the petitioner in regard to the on-road delay allegedly suffered by the consignment, and take a considered view, after taking into account all applicable facts and circumstances as well as the Circulars issued, as applicable and in accordance with law. In TVL. THIRUVANNAMALAIYAR TRANSPORT REP. BY ITS PROPRIETOR SR. V. KESAVAN VERSUS THE DEPUTY STATE TAX OFFICER, STATE TAX OFFICE I (INT) , VELLORE. 2022 (12) TMI 710 - MADRAS HIGH COURT , a learned Judge of this Court has allowed that writ petition, proceeding on the basis of paragraph 10 of Circular No.10 dated 31.10.19, on the facts and circumstances of that case. In light of the factual distinctions noticed in the paragraphs supra, this decision is of no avail to the petitioner in the present case. The writ petition is dismissed with liberty granted to the petitioner to work out its remedy in accordance with law.

Summary

Issues Involved:
1. Validity and extension of the E-Way Bill.
2. Liability to tax and classification of goods.
3. Levy of penalty and discretion of the authority.
4. Applicability of Circulars and precedents.

Summary:

1. Validity and Extension of the E-Way Bill:
The petitioner, a proprietary concern dealing in agricultural implements, had an E-Way Bill valid from 28.02.2023 to 05.03.2023 for transporting a 'Petrol Power Weeder'. The vehicle was intercepted by the Roving Squad on 06.03.2023 at 10.30 a.m. with an expired E-Way Bill. As per Rule 138 of the Central Goods and Service Tax Rules, 2017, the validity of the E-Way Bill could be extended within eight hours of its expiry, i.e., before 8.00 a.m. on 06.03.2023, which was not done.

2. Liability to Tax and Classification of Goods:
The petitioner argued that the goods were agricultural implements exempt from tax. However, the respondent noted that the 'petrol power weeder' is liable to tax at 12%. The determination of tax liability involves examining the nature of the machinery, which is left to the discretion of the authorities.

3. Levy of Penalty and Discretion of the Authority:
The officer levied a penalty at the rate of 200% of the value of goods, amounting to Rs. 3,68,640/-. The petitioner cited Circular No.10/2019, which suggests a penalty of up to Rs. 5000/- per act of contravention when basic documents are available. However, the court found that the petitioner's case did not fall under the examples provided in the Circular, as the transaction was between private parties and not involving exempt goods like fertilizers.

4. Applicability of Circulars and Precedents:
The petitioner referred to a previous decision in Tvl. Thiruvannamalaiyar Transport Vs. Deputy State Tax Officer, where the expiry of the E-Way Bill did not create any scope for tax evasion. However, the court found this precedent inapplicable due to factual distinctions. The court also considered a recent Circular dated 24.02.2023, which amended the protocol for Roving Squads and clarified circumstances for reduced penalties.

Conclusion:
The court dismissed the writ petition, emphasizing that the impugned order was discretionary and had considered all facts and circumstances. The petitioner was granted liberty to pursue remedies in accordance with the law. No costs were awarded, and the connected miscellaneous petition was closed.