The Hon’ble High Court of Calcutta vide its order dated 16.06.2023 in the matter of Usha Martin Limited and Anr. Vs. The Deputy Commissioner of State Tax, Durgapur Range and Ors., entertained and allowed an intra court appeal filed against the order dated 22.06.2022 passed in WPA – 10856 of 2022, dismissing the writ petition filed by the assessees against the order of Appellate Authority confirming the levy of 100% tax and penalty, on the ground that it was filed after two years of the Appellate Order. It was held that it is not a fit case for levying tax and penalty, as there is no intent to evade payment of Tax and no allegation of evasion of tax.

The Appellants filed the intra court appeal before the Hon’ble High Court challenging the order dated 22.06.2023 passed in WPA – 10856 of 2022, whereby the writ petition filed by the appellants against the order of the Appellate Authority levying 100% tax and penalty, was dismissed for being filed after two years from the order of the Appellate Authority.

Facts of the Case: –

• The goods in question were meant for export and the appellants had generated an e-way bill which was valid till 12.09.2019.
• The said goods were damaged while being loaded in to vessel. As a result, the goods had to be taken back to the appellant factory at Ranchi for repairs.  For such purpose the E-Way Bill was generated based on a challan on 07.09.2019 which was valid till 12.09.2019.

Held: –

• The Hon’ble Court after considering the submissions and facts of the case, found that since Tribunal was not constituted the appellants were advised to await the Constitution of the Tribunal and thereafter since the Tribunal was not constituted for almost two years, the appellants were advised to file the writ petition. Further, the appellants have already paid the tax and penalty and therefore, the Hon’ble Court was of the view that the matter can be decided on merits.
• On perusal of the e-way bill on record, it was found by the Hon’ble Court that no tax was payable since the goods which were owned by the appellants were taken back to their factory at Ranchi for repairs. The goods were detained while in transit at about 8.20 a.m. on 13.09.2019. In terms of Rule 138(10) of the WBGST Rules an option is given to the assessee to extend the period of e-Way Bill and such extension should be done before eight hours and after eight hours of the expiry of its validity.  Admittedly the eight-hour period expired about 8.10 a.m. on 13.09.2019 and at about 8.20 a.m. the goods were intercepted and detained.
• It was found by the Hon’ble Court that the identical issue was considered by the Court in various matters i.e., Progressive Metals Pvt. Ltd. v. The Deputy Commissioner, State Tax, Bureau of Investigation, South Bengal, Durgapur Zone & Ors. in MAT 562 of 2023 dated 04.2023 and in KDG Projects Pvt. Ltd. v. Assistant Commissioner of State Tax, Bureau of Investigation (North Bengal) reported in 2022(66) G.S.T.L. 262 (Cal) and the decision in Medha Servo Drives Private Limited & Anr. v. The Assistant Commissioner of, State Tax, Bureau of Investigation (South Bengal), Durgapur Zone & Ors. in MAT 1751 of 2022 dated 17.11.2022.
• That in all these matters the Court considered the conduct of the assessee and having found that the conduct was not with the intention to evade tax, granted relief to those assessees. And the present case would fall under the said category since there is no allegation of any evasion of tax rather it is not disputed that the goods were being transported under a cover of challan to the factory of the appellants for carrying out repairs.
• Lastly, the Hon’ble Court considering the peculiar facts and circumstances of the case, was of the view that it is not a fit case where tax and penalty should have been levied on the appellants.

The Hon’ble Court with the above observations and findings, allowed the appeal as well as the writ petition and set aside and quashed the impugned orders.