2024 (7) TMI 370 - HC - GST

Detention of goods u/s 129 - correct number of the vehicle was not mentioned in part-B of the e-way bill, for which the petitioner has explained that the truck number of the vehicle, which is mentioned in the e-way bill was suffered breakdown and therefore, the goods were being transported in another truck - HELD THAT - The statement in Form made by the driver in Form GST MOV-01 also refers to the transportation of the goods from Ahmedabad to Surat only with regard to the carrying out the temporary arrangement made to reach upto Surat so as to ship the cars being transported in the vehicle whose number is mentioned in the e-way bill. It is also not in dispute that the goods were stopped transfer from Ahmedabad to the branch of the petitioner at Thane in Maharashtra and does not involve any transaction or sale of purchase. In view of Circular no. 64/38/18, it is clear that the minor errors, which are of its some examples are given in para-5 are required to be dealt with by imposing penalty of Rs. 500/- under Section 125 of the GST Act and Rs. 1,000/- under the IGST Act. The respondent no. 2 has not disputed the fact that the chassis number of the vehicle is different than that of what is mentioned in the invoice and the e-way bill number. Even the transport receipt number is also mentioned in e-way bill is also the same. In the facts of the present case, the impugned order of demanding tax and penalty in Form GST MOV-09 is without jurisdiction as the respondent no. 2 could not have detained vehicle on the ground of invalid e-way bill. The impugned order dated 14.01.2020 demanding the total tax of Rs. 18,74,972/- and total penalty of the equal amount under clause (a) of sub-Section (1) of Section 129 of the GST Act is hereby quashed and set aside. Appeal allowed.

Summary

Issues Involved:

1. Validity of detention order under Section 129 of the GST Act.
2. Applicability of the circular dated 14.09.2018 issued by the Central Board of Indirect Taxes and Customs.
3. Jurisdiction and legality of the tax and penalty demand.

Issue-wise Detailed Analysis:

1. Validity of Detention Order under Section 129 of the GST Act:

The petitioner challenged the detention order dated 11.01.2020 and subsequent order dated 14.01.2020 under Section 129 of the GST Act, claiming that the goods were accompanied by a valid tax invoice and e-way bill. The petitioner argued that the mismatch in the vehicle number was due to an emergency replacement truck following a breakdown. The e-way bill mentioned the correct chassis number of the car, establishing that the goods were properly accounted for. The court found that the petitioner had no intention to evade tax, and the error in the vehicle number was a minor procedural breach, not justifying detention under Section 129 of the GST Act.

2. Applicability of the Circular Dated 14.09.2018:

The petitioner relied on the circular dated 14.09.2018, which clarifies that minor errors in the e-way bill should not lead to detention under Section 129 of the GST Act. The circular lists specific minor errors, such as mistakes in the vehicle number, that should only attract a token penalty under Section 125 of the GST Act. The court agreed with the petitioner, noting that the minor error in the vehicle number fell within the scope of the circular, thus making the stringent action under Section 129 inappropriate.

3. Jurisdiction and Legality of the Tax and Penalty Demand:

The petitioner contended that the demand for tax and penalty was arbitrary and illegal, as the goods were moving from Gujarat to Maharashtra, constituting an inter-state supply. The court observed that the goods were accompanied by a valid e-way bill and tax invoice, and the only discrepancy was the vehicle number due to a breakdown. The court found that the respondent's reliance on the circular was misplaced, as the circular supported the petitioner's case. The court held that the respondent's order demanding tax and penalty was without jurisdiction and set aside the impugned order, directing a refund of any deposited amount.

Conclusion:

The court quashed the impugned orders dated 11.01.2020 and 14.01.2020, finding that the detention and demand for tax and penalty were without jurisdiction. The court ruled that minor errors in the e-way bill, such as a vehicle number mismatch due to a breakdown, should be addressed with a token penalty under Section 125 of the GST Act, as per the circular dated 14.09.2018. The court ordered the refund of any amount deposited by the petitioner and made the rule absolute to the stated extent, with no order as to costs.