The Hon’ble High Court of Calcutta vide its order dated 31.01.2023 in the matter of Karan Singh Vs. State of West Bengal & Ors. in W.P.A. 72 of 2023, set aside the order of detention, whereby the goods of the assessee were detained on the ground of expiry of E-way Bill and Tax along with penalty was imposed.  It was found that the detention of goods was not proper as there was no intention to evade payment of tax, moreover, the goods along with vehicle were intercepted and detained within 40 minutes of the expiry of E-way bill, which is well before the 8 hours’ time available to the assessee for extension of E-way bill under Rule 138 and hence, not sustainable. 

Facts of the Case: –

• That the petitioner is a proprietor of M/S. Safe & Speed Cargo Movers having his office at Chennai, and the petitioner being in the business of transportation, was given a task for transporting a heavy vehicle (JCB) from MGB Motor and Auto Agencies Private Limited at Hyderabad.
• That invoice raised by the MGB Motor and Auto Agencies Private Limited, was issued with IRN number generated as per the provisions of CGST Act and Rules, which is a unique number and also bears a unique QR code of authenticity generated from the GSTN portal. Further, the invoice categorically records the GSTIN of MGB Motor and Auto Agencies Pvt. Ltd.
• The goods in question were to be delivered from Pune, Maharashtra to Malli Bazar in the District of Darjeeling, West Bengal and the movement of the goods was by road. The invoice reflects that Integrated Goods and Service Tax of 18 % under the Integrated Goods and Service Tax Act is charged and paid against the inter-state movement of the goods.
• The Petitioner had to arrange a trailer having registration No.NL01AD-6459 as the JCB in question is a heavy vehicle approximately 40 Feet long and while the said trailer was transporting the aforesaid JCB towards its destination. That as per the E-way bill the JCB would have to be delivered to its destination by 12th July, 2022. However, the trailer carrying the said JCB reached and parked at Ghoshpukur in the District of Darjeeling.
• Since the said JCB was not delivered in the address of the recipient, the respondent authority claimed GST from the petitioner and issued a show-cause notice to authorized representative of the petitioner.
• Despite the fact, the authorized representative of the petitioner duly replied to the said show-cause notice and explained that the goods were in transit to Melli, Darjeeling and it was moved on the basis of valid tax paid documents, the Adjudicating Authority with utmost hurry and haste passed an order of Demand of Tax and Penalty on  vide Form GST MOV-09 confirming Demand of Tax and Penalty of Rs.19,52,542/- against the petitioner under Section 129(3) of the said Act.
• Being aggrieved of the said order, the petitioner preferred an appeal before the Appellate Authority under Section 107 of the Act, and the said appeal was also dismissed confirming the order passed by the Adjudicating Authority.

It was submitted on the behalf of the petitioner that the issue whether delay of 3 days after the expiry of the stipulated period in E-Way Bill to deliver consignment can be condoned was before the Hon’ble Supreme Court in the case of Assistant Commissioner (ST) & Ors. Vs. M/S. Satyam Shivam Papers Pvt. Ltd. & Anr. (petition for Special Leave to Appeal No.21132/2021 dated 12th January, 2022), wherein the Hon’ble Supreme Court condoned the delay by imposition of cost.  It was held by the Hon’ble Supreme Court that the respondent was able to establish sufficient cause for condonation of delay.

In response, it was submitted on the behalf the Respondents, that that the liability of payment of tax under GST was diluted in the aforesaid decision relying on the decision of this Court in Assistant Commissioner, State Tax, Durgapur Range, Government of West Bengal Vs. Ashok Kumar Sureka, Proprietor of Subham Steel.  Further, it was submitted that that the decision in A.K. Sureka (supra) is challenged before the Hon’ble Supreme Court in appeal and the said appeal is still pending before the Hon’ble Supreme Court. Therefore, the issue whether imposition of tax after expiry of few hours of E-Way Bill can be diluted or not is under consideration before the Hon’ble Supreme Court. Thus, any decision taken by this Court may cause prejudice to either of the parties.  Further, the decision relied upon by the petitioner in M/s Satyam Shivam Papers Pvt. Ltd. (supra) is not relevant under the facts and circumstances of this case and since Ashok Surekha is before the Hon’ble Supreme Court, no final order should be passed in the instant writ petition.  Moreover, it is the transporter duty to extend the period of E-Way Bill and the Adjudicating Authority had no role to exercise discretion in the matter.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, found that the issue as to whether the authority were justified in imposing tax and penalty on the ground that at the time of interception, the validity period of the E-Way bill stood expired and came up for consideration before this Court in Hanuman Ganga Hydro-projects Private Limited Vs. Joint Commissioner, State Tax Authority, Siliguri Circle & Anr., wherein it was held by the Coordiante Bench of this Court since it is not a case of willful attempt on the part of the writ petitioner to evade payment of tax, the orders passed by the appellate authority and penalty were all set aside and quashed.
• Further, on careful perusal of the materials on record as well as the relevant, it was found by the Hon’ble Court that in terms of Rule 138 of the CGST Rules, 2017, the validity of E-way Bill may be extended within 8 hours from the date of its expiry. In the instant case, the consignment (GSV) transported from Pune, Maharashtra to Malli Bazar, Darjeeling, and the delay was only of 41 minutes in delivering the consignment.  The imposition of tax was made by the Adjudicating Authority within 40 minutes from the expiry of E-way Bill.
• Thereafter, the Hon’ble Court not agreeing with the submissions made on the behalf of the respondents, held that the Adjudication authority before imposition of Tax and penalty ought to have communicated to the transporter about his right to extend the period but the Adjudicating Authority failed to perform and the Appellate Authority failed to consider.
• The Hon’ble Court therefore, held that it is the discretion of the Adjudicating Authority to extend the period of E-Way Bill up to 8 hours from the time of its expiry. The Adjudicating Authority failed to exercise its discretion.

The Hon’ble Court with the above findings, allowed the writ petition by setting aside the order passed by Adjudicating Authority and affirmed by the Appellate Authority.