GST Dept cannot seize Vehicle for want of Second E-Way Bill since First E-Way Bill was Valid: Calcutta HC [Read Order]

The Calcutta High Court has held that the GST department shall not seize the vehicle in the absence of second e-way bill since the first e-way bill was valid during the period of interception. A bench of Justice T. S. Sivagnanam and Justice Hiranmay Bhattacharyya was considering an appeal by the department challenging the single bench decision of the same Court wherein the proceedings against the assessee, Ashok Kuamr Sureka, a Proprietor, were quashed. Earlier, the assessee challenged the detention of the vehicle along with the goods and the demand of tax and penalty not to be justified on the ground that the e-way bill, which was being carried in the vehicle transporting the goods had expired on the midnight of 8th September, 2019 and the goods were being transported on 9th September, 2019 and the vehicle was intercepted at 1.30 p.m.(noon) and according to the writ petitioner the vehicle transporting goods had broken down and on account of which, there was delay and there was no willful intention to evade payment of tax. The Single Judge has confirmed all these facts and held that the respondent /writ petitioner will be entitled to get refund of penalty and tax paid on protest subject to compliance of all legal formalities. Concurring with the order of the Single Judge, the High Court held that “in the instant case, the bona fides of the writ petitioner has to be tested on the documents, which were available on record. Firstly, we find that the tax invoice has been raised by Bhaskar Steel and Ferro Alloy Pvt. Ltd. dated 7th September 2019. There is no dispute as regards the quantity and description of the goods. The said vendor had raised the e-way bill dated 7th September 2019 as the goods were to be despatched from SRMB Srijan Pvt. Ltd. to the writ petitioner, who had its registered office at Kolkata. The said e-way bill was valid up to 9th September 2019 since the approximate distance was about 168 kilometers. The writ petitioner’s case was that they are traders and they had a supply order from Om Dayal Educational and Research Society, which also has its registered office at Kolkata, however, the goods had to be shifted to a place in Durgapur. Therefore, the writ petitioner raised a second e-way bill on 7th September, 2019 and since the distance from SRMB Srijan Pvt. Ltd., Durgapur to the Delhi Public School, Durgapur was only 9 kilometers, the e-way bill was valid only for one day, i.e. 7th September, 2019 to 8th September, 2019 (midnight).” While concluding, the Court added that “We need not go into the controversy as to whether there was a break down of the vehicle, etc. The case has to be approached by considering the bona fides of the transaction as to whether the case warrants detention of the goods and collection of tax and penalty. Admittedly, the first e-way bill dated 7th September 2019 was valid up to 9th September 2019. Therefore, in the absence of second e-way bill, the tax authorities at Durgapur could not have intercepted or detained the vehicle. Therefore, the explanation offered by the respondent / writ petitioner was an acceptable explanation and a case cannot be made out that there was a deliberate and willful attempt on the part of the respondent / writ petitioner to evade payment of tax so as to justify invocation of the power under Section 129 of the Act.” Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.