Imposing 200% Penalty For Not Renewing The Expired E-Way Bill Not Sustainable 

Facts of the Case: –

• The allegation against the appellant which led to an order of penalty being passed by the respondent authority is that the goods which were being transported by the appellants to Assam were covered by e-Way Bill which was valid up to 18th March, 2022.
• As informed by the appellants, on account of the breakdown of the vehicle the goods did not move outside the territory of the State of West Bengal and was stationed at Dankuni on 18.03.2022.
• Though, the consignee in the meantime had sold the goods which were in transit to another purchaser in Assam and were being transported by the same vehicle after generating a new e-Way Bill on 22.03.2022.
• The said vehicle was detained on 25.03.2022 and the order of penalty was passed on the ground that the first e-way bill, which expired on 18.03.2022 had not been renewed/extended by the appellants.
• Accordingly, a charge under Section 129 of the CGST Act and WBGST Act was made against the appellants and ultimately resulting an imposition of 200% penalty.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, found that it is not in dispute that at the time of interception on 25.03.2022, the appellants had a valid e-way bill. Thus, the only mistake committed by the appellants was not renewing the e-way bill which expired on 18.03.2022.
• The Hon’ble Court was of the opinion that the appellants should have done so, as the goods were sold in transit. So, there was violation on the part of the appellants, however, the violation is not so grave as to call for imposition of penalty of 200%.
• It was found by the Hon’ble Court that on the date when the vehicle was intercepted the goods were covered with valid e-way bill which satisfies the requirement under Section 129 of the Act. However, the appellants should be put on terms for committing a mistake in not renewing the earlier e-way bill which expired on 18.03.2022.

The Hon’ble Court with the above observations and findings, allowed the appeal as well as the writ petition by setting aside the order of penalty passed by the adjudicating authority and affirmed by the Appellate Authority.  The orders were modified with the direction to the appellants to pay a penalty of Rs. 50,000/- from the bank guarantee which has been furnished by the appellant.  The respondents upon adjustment of the amount shall issue appropriate communication to the appellant’s bank to discharge the bank guarantee for the remaining amount.

To read the complete judgment dated 16.6.2023 2023 Taxo.online 639
To read the complete judgment dated 23.6.2023 2023 Taxo.online 620