GST Caselaw

#GSTCase-45-Gist of Cases on E-Way Bill-Part B of E-Way Bill not Filled, Validity period of E-Way Bill Expired, Challenge to Validity of Rule 138(10), Opportunity of Hearing not provided before passing order

#GSTCase-45-Gist of Cases on E-way Bill-Part B of E-Way Bill not Filled, Validity period of E-Way Bill Expired, Challenge to Validity of Rule 138(10), Opportunity of Hearing not provided before passing order

 

Cases Covered

 Case-1:-Preethi Kitchen Appliances (P.) Ltd. v. State Tax Officer [2019] 101 taxmann.com 485 (Madras)

Case-2: Bright Road Logistics (P.) Ltd. v. Commercial Tax Officer, Bengalure [2019] 101 taxmann.com 371 (Karnataka)

Case-3: Orson Holdings Company Ltd. v. Union of India [2018] 100 taxmann.com 206 (Gujarat)

Case-4: Commissioner, Goods & Service Tax Act, UP v. Aneja Cargo [2019] 101 taxmann.com 126 (Allahabad)

Case-5: Sarvottam Rolling Mills (P.) Ltd. v. State of U.P. [2019] 101 taxmann.com 127 (Allahabad)

  

Case-1:-Preethi Kitchen Appliances (P.) Ltd. v. State Tax Officer [2019] 101 taxmann.com 485 (Madras) 

 

  • Issue Involved: Part-B of the E-way Bill not Filled
  • Facts: The impugned detention order was passed on the reason that Part-B of E-Way bill was not updated.
  • Contention by the Petitioner: Part-B of the E-Way bill was properly filled up and also updated and therefore, the consignment could not be intercepted. Ventilating such grievance, the petitioner has also made a representation on 28.12.2018 itself before the third respondent and sought for release of the consignment. However, as the said representation has not been considered so far, the present writ petition is filed before this Court.
  • Held: Considering the above stated facts and circumstances and without expressing any view on the merits of the contentions raised by the petitioner as well as the respondents in the impugned detention proceedings, this writ petition is disposed of as follows:

a) The petitioner shall pay one time tax liability of Rs. 1,61,032.78 under the CGST Act and Rs. 1,61,032.78 under the SGST Act before the second respondent within a period of four days from today.

b) On receipt of such payment, the detained goods shall be released forthwith.

The petitioner is given liberty to agitate the matter before appropriate authority by filing appropriate petition.

  

Case-2: Bright Road Logistics (P.) Ltd. v. Commercial Tax Officer, Bengalure  [2019] 101 taxmann.com 371 (Karnataka)

 

  • Issue Involved: Opportunity of hearing not provided 
  • Facts: The petitioner was transporting certain goods as detailed in the order of confiscation. The said conveyance bearing registration No.KA-07-A-8570 was intercepted by the officers of the Revenue Department on 04.08.2018 at 6.55 a.m., near Nelamangala Toll Gate, Tumkur Road, Bengaluru. After a verification of the goods in the conveyance, it was found that the consignment consisted of readymade garments worth of Rs.33,35,335/- and the said consignment was not accompanied by valid documents like tax invoice and e-way bill and the same was in contravention of the provision of Section 68(1) of the CGST Act, 2017 and KGST Act, 2017.
  • Contention of the Petitioner: The order stands vitiated on the sole ground that there is non-compliance of the mandate under the provisions of Section 129(4) of the Act and hence the same warrant interference at the hands of this Court.
  • Held: From a plain reading of the order, it is apparent that the contention raised by the learned counsel for the petitioner, that no opportunity has been afforded under Section 129 (4) of the CGST Act stands falsified. It is apparent that the alleged owners have waived the right of hearing and have consented, levy of tax and penalty and have undertaken to pay as per the provisions of Section 129(1)(a) of the CGST Act. Despite the same, the petitioner has been heard in the matter.As stated earlier, the matter requires adjudication of facts, which are seriously disputed by the parties. This Court in exercise of supervisory jurisdiction cannot enter upon and adjudicate factual issues under Article 226 of the Constitution of India, in the light of availability of an alternative remedy. 
  • Cases Referred: Assistant State Tax Officer v. Indus Towers Ltd. [2018] 95 taxmann.com 160

 

Case-3: Orson Holdings Company Ltd. v. Union of India [2018] 100 taxmann.com 206 (Gujarat)

 

  • Issue Involved: Constitutional Validity of Rule 138(10) of Central Goods and Services Tax Rules, 2017 challenged to the extent said provision restricts validity period of e-way bill in terms of distance to be travelled in a day. 
  • Contention of the Petitioner:

a) Validity of Rule 138(10): The petition challenges constitutional validity of rule 138(10) of the Central Goods and Services Tax Rules, 2017/Gujarat Goods and Services Tax Rules, 2017 as being violative of Articles 14, 19(1)(g) and 301 of the Constitution of India, to the extent the said provision restricts validity period of the e-way bill in terms of distance to be travelled in a day.

b) Principle of Natural Justice as the order passed before the date of Hearing: Reference was made to the impugned order passed under section 129(3) of the Act, to point out that the same has been passed on 28.09.2018 without waiting for the date of hearing, that is, 02.10.2018. It was submitted that therefore, the impugned order has been passed in breach of the principles of natural justice. It was submitted that despite the fact that in the show cause notice the date has been fixed, the order has been passed prior to the said date, without giving an opportunity of hearing to the petitioner, which is in breach of sub-section (4) of section 129 of the Act.

c) Penalty Under Section 122(1)(xiv) and Penalty Under Section 129:It was further pointed out that penalty is sought to be imposed under section 129(1) of the Act, whereas section 122(1)(xiv) of the Act provides that where a taxable person who transports any taxable goods without the cover of documents as may be specified in this behalf, he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded or the tax not deducted under section 51 or short deducted or deducted but not paid to the Government or tax not collected under section 52 or short collected or collected but not paid to the Government, etc., whichever is higher.

d) Reference to Section 73(8) and 74(8) of CGST Act, 2017:-It was submitted that in the facts of the present case, the petitioner had deposited the amount of tax and penalty within thirty days from the date of issue of the notice and therefore, the petitioner was entitled to the benefit of sub-section (8) of section 73 of the Act. It was submitted that therefore, even in the case of fraud or wilful misstatement or suppression of facts, the statute provides for payment of penalty equivalent to twenty-five per cent of the tax within thirty days from the date of the notice.

e) Circular No. 64/38/2018-GST Dated 14th September 2018:-The attention of the court was also invited to the circular No.64/38/2018-GST dated 14th September, 2018 and more particularly, clause (5) thereof, which provides that in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under section 129 of the CGST Act may not be initiated, inter alia, in the situations enumerated thereunder. It was submitted that the situations enumerated in the said circular are illustrative and not exhaustive. Therefore, a mistake in writing distance can be deemed to have been included within the ambit of the said circular.

f) Challenge to the Power of the State Tax Officer to pass the Impugned order: Another contention raised by the learned advocate for the petitioner is that in terms of the Government of India circular No.3/3/2017-GST dated 5th July, 2017, the functions under different sections of the Central Goods and Service Act, 2017 or the rules made thereunder, are specifically delegated to the officers in terms of the said circular. It was pointed out that the powers under sub-section (3) of section 129 of the Act have been delegated to the Deputy or Assistant Commissioner of Central Tax. It was contended that the impugned order has been passed by the State Tax Officer, who is not an officer empowered to exercise powers under sub-section (3) of section 129 of the Act and therefore, suffers from lack of jurisdiction. 

  • Held: Having regard to the submissions advanced by the learned advocate for the petitioner, Issue Notice returnable on 10th January, 2019. 
  • Cases Referred: Kailash Chandra v. Mukundi Lal AIR 2002 SC 829

 

Case-4: Commissioner, Goods & Service Tax Act, UP v. Aneja Cargo [2019] 101 taxmann.com 126 (Allahabad)

 

  • Issue Involved: First Appellate Authority deleted penalty and revenue filed writ petition challenging order of First Appellate Authority before High Court pending constitution of Tribunal
  • Facts: Writ petition was filed against the order passed by the Appellate Authority dated 05.11.2018, by which the penalty imposed by the Assistant Commissioner (Mobile Squad), Jhansi under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘Act’) has been deleted.
  • Contention by the Petitioner: In the first place, in the absence of any Tribunal having been constituted, the revenue is left without any statutory remedy and, therefore, the present writ petition may be entertained.The findings recorded by the first Appellate Authority are perverse, inasmuch as this was the respondent’s case that it had transported two consignments of different goods from Sonipat to Jhansi on 21.09.2018 and again on 24.09.2018 (disputed transaction). However, upon enquiry made, the explanation furnished by the assessee with respect to first transaction was found to be false. Even with respect to the goods that were seized which have resulted in the penalty proceedings, discrepancy in quantity of goods has been found to be established and, therefore, in his submission, the first Appellate Authority has erred in overlooking that vital aspect of the matter and in deleting the penalty.
  • Held: Pending constitution of the Tribunal, the present writ petition has been thus entertained.Matter requires consideration. Learned counsel for the assessee (respondent) may file counter affidavit within four weeks. Rejoinder affidavit may be filed within two weeks thereafter. In the meanwhile, subject to the respondent depositing Rs. 4,00,000/- in cash and furnishing security, other than cash and bank guarantee, for another Rs. 4,00,000/-, the goods in question alongwith vehicle shall be released in favour of the respondent.

 

Case-5: Sarvottam Rolling Mills (P.) Ltd. v. State of U.P. [2019] 101 taxmann.com 127 (Allahabad)

  • Issue Involved: Validity period of E-Wy Bill Expire
  • Facts: The goods of the petitioner, which were coming from Muzaffarnagar to Hapur, were seized under section 129(1) of the Uttar Pradesh Goods Services Tax Act, 2017 for the reason that the E-Way Bill had expired.
  • Contention of the Applicant: E-Way Bill had expired in the midnight on 21.11.2018 and goods were seized one hour after the expiry of the said time. The goods had reached at the destination in time but on account of no entry, the vehicle could not enter into the city. In the meantime, the detention order was passed. 
  • Held: The seized goods and the vehicles be released forthwith on furnishing security in the form of bank guarantee of the amount equivalent to that as prescribed under section 129(1) of the U.P. GST Act. With the aforesaid observation, the writ petition stands disposed off.
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