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#GSTCase-179-Round up of E-Way Bill Judgments-Different addresses mentioned on Eway bill and Invoice; CGST and SGST Charged on invoice against IGST, Delivery of goods twice on same E-Way Bill supported by evidence in the form of statements of driver, records of Toll Plaza and GPS location of driver/goods-in-charge

Sri Krishna Traders v. State of Gujarat [2020] 116 450 (Gujarat)

Challenge to Validity of Proceedings initiated under Section 130 of CGST Act, 2017

Facts: By an ad-interim order, Court had directed that goods to be released upon writ applicant on depositing the due amount. With this direction, writ applicant availed benefit of an interim-order and got goods released, on payment of requisite amount. The Court was called upon to adjudicate legality and validity of order passed by the authority in GST MOV-11.

Held: There were two grounds raised by department for the purpose of confiscation of goods. First is e-way bill was not generated and second ground was under valuation. In what state of circumstances authority would be justified to invoke section 130 of the Act, for the purpose of confiscation, is now explained in detail in Para No. 99 to 104 of Synergy Fertichem (P.) Ltd. v. State of Gujarat [2019] 103 426/72 GST 641 (Guj.)

Rifty Vinimay Enterprises v. State of Gujarat [2020] 114 565 (Gujarat)

Direction to release goods on furnishing of application under Section 67(6) for provisional release of goods

Held: Since,petitioner submitted that they would file an appropriate application under section 67(6) of the GST Act, 2017 for provisional release of the goods and conveyance during the adjudication process of the notice issued under section 130 of the GST Act, 2017 by the authority and would approach before authority to proceed with adjudication process under section 130 of the GST Act, 2017, therefore in view of above submissions, petition was disposed of by directing respondents authorities to consider application to be made by petitioner for provisional release of goods and vehicle in accordance with law. The respondent authorities were directed to decide such application as expeditiously as possibly preferably within two weeks from date of receipt of such application of the petitioner.

M. R. Traders v. Assistant State Tax Officer [2020] 116 37 (Kerala)

Goods detained on the fact that delivery address mentioned on invoice and delivery address mentioned on Eway bill was different

Facts: The petitioner has GST registration in State of Kerala as well as Karnataka.In course of its business, petitioner had generated tax invoice dated 25-1-2020 for supply of Timber Tali Rough Square Logs from M R Traders, Karnataka to Kerala. The petitioner had calculated and paid CGST @ 9% and SGST @9% which is reflected in the tax invoice. An E Way Bill No.151196575196 was generated to transport goods through a vehicle bearing Registration No.KA 19AC 5112 for on road transport, vehicle bearing Registration No.KA 19 AC 5112 for on road transport, according to which the value of goods is Rs. 507859.02/-including GST.

While being so, the 1st respondent seized the vehicle when the goods were being unloaded in the firm’s premises at Kizhissery, Malappuram and the department issued Notice No.MOV 02 No/GST/93/19-20 dated 27-1-2020. The Notice was issued under Sec.129 (3) of the Central Goods and Service Tax Act, 2017 and the State/Union Territory Goods and Services Tax Act, 2017/under Section 20 of the Integrated Goods and Services Tax Act, 2017 seizure of the consignment that imposes extra tax and penalty for the release of the same, for the reason that the tax invoice and E Way bill are addressed to Erattupetta, Kottayam address and there is no document seen accompanied to unload the goods at Kizhissery.

The petitioner had calculated and paid CGST @9% and SGST @9% which is reflected in the tax invoice. The petitioner had declared the goods through online while generating E Way bill. The petitioner had recently started a branch of the firm at Kizhissery, Malappuram and these goods were to be transported to his branch. The petitioner firm had done everything their capacity to ensure that the details of the new branch is updated in the official site, however the same showed as ‘processing’. It was due to inexperience of trainee staff of the petitioner’s firm. The delivery address was shown as M R Trades, Erattupetta, Kottayam instead of Kizhissery Malappuram. The principle of natural justice has not been followed by the 1st respondent. The petitioner had submitted all the relevant documents before the 1st respondent. More over the 1st respondent has no authority to impose huge amount as penalty and other charges.

Held: Hon’ble Court ordered that vehicle and goods detained in pursuance of impugned order shall be immediately released by to the petitioner on his furnishing bank guarantee for the amounts shown in order. Thereafter, department will duly take up the matter for finalization of adjudication proceedings and shall afford adequate opportunity of being heard to the petitioner through their representative/counsel and while doing so, they shall take into consideration vital contention urged by the petitioner that the error pointed out by respondent, that address shown in invoice is different from address shown in E Way bill etc. is only a clerical mistake and is not a serious mistake which should justify the detention and penalty proceedings and also the other contentions raised by the petitioner.

Umiya Enterprise v. Assistant State Tax Officer [2020] 114 564 (Kerala)

Goods detained since CGST and SGST was levied on the invoice in place of IGST

Facts: In the regular course of business, petitioner’s main supplier M/s. Rukmoni Boards Pvt. Ltd, Chennai despatched plywood under cover of valid invoice and E-Way bill on 10.1.2020 to petitioner in Kerala. The 1st respondent intercepted conveyance containing consignment invoking provisions in sec.129 alleging defects that no IGST is seen collected in tax invoice which amounts to contravention of sec.5(1) of the IGST Act read with Rule 46(e) & (m) of the CGST Rules. The petitioner was called upon to show cause as to why an amount of tax Rs. 1,20,985/-and the same amount as penalty under the IGST Act should not be imposed.

Contention of Petitioner: The alleged contravention of provisions is not at all a valid reason for suspecting genuineness of consignment. Supplier of goods is a registered dealer in Tamil Nadu holding valid GST registration. In invoice element of tax happened to be wrongly shown as CGST and SGST @ 9% as against IGST of 18%. This is an inadvertent mistake committed by the new Accountant of the supplier however tax in E-way Bill has been correctly declared as IGST Rs. 1,20,985/-. E-Way Bill issued under Rule 138 of the GST Rules generated on line is the fundamental document proving the correctness of the goods transported. The clerical error in the invoice will not prejudice the Revenue in any manner and the returns will automatically set right such trifling errors in documentation. However, the E-Way bill having been correctly generated, any adverse presumption of tax evasion is wholly out of context and untenable. It is also submitted that as per the provisions in sec.126 of the GST Act dealing with the general disciplines related to penal proceedings are not to be initiated for minor breaches of tax regulations or procedural requirements, omission or mistake in documentation.

Contention of Respondent: An argument was raised on the side of the respondents that the tax and penalty has been demanded as per the impugned order as otherwise there will be loss of tax revenue to the State of Kerala.

Held-Hon’ble Court held thatpetitioner has made out a strong case by which Court was persuaded to accept view that goods and vehicle detained could be released to petitioner on the basis of simple bond and it need not be insisted that petitioner will have to furnish a bank guarantee for amounts demanded in order.

It was further observed that respondents did not have any case that petitioner concern has any previous adverse records of tax evasions of non-compliance of tax laws. The above said contentions raised by petitioner on the basis of E-Way bill were held to be substantially strong to persuade the Court that goods could be released on condition that petitioner executes a simple bond in that regard. Hon’ble court on the basis of contention by counsel for petitioner further directed that petitioner may take steps to ensure that details are collected from local supplier involved in this transaction, which is based in Tamil Nadu, to ascertain whether said agency has duly filed their returns showing above said transaction also etc. and if such details are also available, the petitioner may produce those materials also before 1st respondent, as a matter of abundant caution to convince 1st respondent that there is no loss of revenue involved in this case etc. Thereafter, 1st respondent would afford reasonable opportunity of being heard to petitioner through authorised representative or counsel, if any and then will pass final orders in adjudication proceedings finalizing the same, without much delay. In this regard, it was ordered that all contentions raised by petitioner and any of the contentions that may be raised by petitioner before the 1st respondent should be duly adverted to and considered by the 1st respondent before passing the order and finalizing adjudication proceedings in that regard.

Govindwal Sahib Vanaspati Mills v. State of Rajasthan [2020] 116 111 (Rajasthan)

Availability of Alternative remedy and Claim of Petitioner being Owner of the goods to be determined by competent authority since department from the statements of driver, records of Toll Plaza and GPS location of driver/goods-in-charge has claimed that goods covered by E-way Bill carried alongwith the goods stand delivered insofar as the E-way bill dated 7/12/2019 is concerned

Facts: Vehicle No. PB-03-AT-4881 loaded with cotton seed oil from M/s. Sunil Oil Mills, Goluwala, Rajasthan TO Punjab was intercepted on 9/12/2019 at Sriganganagar by issuing MOV-1 and MOV-2 indicating that owner/driver/person-in-charge of the goods has tendered documents for verification and upon verification authority was of opinion that inspection of the goods under movement was required to be done under the provisions of section 68(3) of the RGST Act read with Central GST Act, 2017 on account of the fact that E-way bill was dated 7/12/2019 and it was claimed that the vehicle broke down on the same date at the starting point and on account of contradictory statements, the documents were also required to be examined.

Certain other documents i.e. Form MOV-3, MOV-4 and MOV-6 were placed on record whereby, goods have been detained indicating findings based on statements of driver of truck regarding violation of provisions of GST Act and with reference to GPS Status of the vehicle in question,

Contention of Petitioner: With reference to provisions of section 129 of Act that petitioner being consignee of goods was deemed to be owner and was, therefore, entitled to seek release of the goods under section 129 of the Act and, therefore, action of respondents in denying release of goods despite petitioner being ready to comply with requirements of provisions is wholly unjustified and, therefore, respondents be directed to comply with requirements of section 129 of Act and release the goods.

Contention of Respondent- Petitioner does not have locus standi to invoke extra ordinary jurisdiction of this Court as petitioner has failed to establish his ownership on the goods found in the intercepted vehicle. Submissions have been made that pursuant to the notice MOV-6 and MOV-7 dated 28/12/2019 the requisite order has been passed on 14/1/2020, which order is appealable under section 107 of the Rajasthan GST/Central GST Act and, therefore, the petition is not maintainable.

It is submitted that from the material which has come on record, it is apparent that goods are from one M/s. Sunil Oil Mills, Goluwala and though E-Way bill pertains to the petitioner, from the statements of driver, records of the Toll Plaza and GPS location of the driver/goods-in-charge it is apparent that the goods which were loaded by M/s Sunil Oil Mills on 7/12/2019 have already been delivered to the petitioner on 8/12/2019 and in second round the vehicle (oil tanker) was refilled for some other firm and it started its journey under the same E-way bill and other documents only with a motive to avoid tax liability and, therefore, the petition deserves to be dismissed.

Held: Hon’ble Courtobserved that copious material produced by respondents showed modus operandi being employed for the purpose of evasion of tax liability under provisions of the Act and on that count status of the petitioner in seeking release of the goods claiming himself to be the owner, if at this stage was recognized by the respondents, would likely to prejudice plea/stand which was taken by respondent department. The status of petitioner as owner of goods is in question inasmuch as while petitioner relied on E-way bill dated 7/12/2019 for claiming himself the consignee, the claim of the respondents was that goods already stood delivered insofar as E-way bill dated 7/12/2019 was concerned. Therefore, claim of petitioner as owner qua goods which are loaded on detained vehicle had to be determined by competent authority in accordance with law and said aspect could not be preempted by directing release of goods to the petitioner.

No rejoinder was filed by petitioner disputing and/or contradicting material which had been produced by respondents by way of detailed reply and, therefore, at this stage, purportedly innocuous prayer made by petitioner could not be taken on its face value so as to order for release of the goods/vehicle. The order by competent authority was open to appeal and, therefore, on account of availability of alternative remedy also interference under Article 226 of the Constitution of India in the present nature matter was held not to be justified.