E-Way Bill Provisions Challenged in Gujarat High Court: Issues notice to Centre and State [Read Petition & Order]

A petition in Gujarat High Court has challenged E-Way Bill provisions. The division bench comprising of Justice Harsha Devani and Justice A.P Thaker has issued the notice to Centre and State.

The Petitioner company “Orson Holdings Company Limited” has challenged the Rule 138(10) of The Central Goods Services Tax Rules,2017 (CGST) and Gujarat Goods and Services Tax Rules, 2017 (GGST) on the ground that the aforesaid rule is arbitrary and unreasonable and is therefore violative of Article 14 of the Constitution and it puts unreasonable fetters on the right to transport of goods which seriously affects petitioner’s right to carry on his trade or business guaranteed under Article 19(1)(g) of Constitution of India.

The Petitioner was represented by Advocate Vinay Shraff with Nipun Singhvi, Vishal J Dave and Prateek Gattani who challenged on the grounds that right of freedom to carry trade, commerce and intercourse throughout the territory of India granted under Article 301 of the Constitution of India.

The petition also challenged the order passed by the tax officer, to levy penalty for inadvertent error in the e-way bill in terms of approx distance as 50km instead of actual distance (500km approx) without any malafide intention, by violating principles of natural justice in terms of not granting opportunity of hearing as well passing a non-speaking order.

The petition also involves substantial question of law of general importance about whether it is mandatory for the proper officer to apply his mind to ascertain whether there is malafide intent to evade tax in transportation of goods before levying penalty under Section 129 of the Central Goods Services Tax Act,2017 (CGST Act for short) and under Section 129 of the Gujarat Goods and Services Tax Act,2017(GGST Act for short) or he is required to mandatorily levy penalty even in cases of inadvertent errors in the e-waybill or documentation  without any malafide intention.

CA.Abhishek Chopra, GST expert aware of the matter said that “the petition raises question of law of general importance that whether such minor discrepancy of wrong mention of distance for movement of goods shall fall under Section 126 which mandates that no penalty shall be levied for minor breaches of tax regulations or procedural requirements, and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence. It shall be interesting to see whether the malafide intention is to be seen or not? This case shall lay down the law on the same”.