The Hon’ble High Court of Madras vide its order dated 13.12.2022 in the matter of TVL. Thiruvannamalaiyar Trasport Rep. By Its Proprietor Sr. V. Kesavan Vs. The Deputy State Tax Officer, State Tax Office – I (INT), Vellore in W.P.No.32960 of 2022 And WMP.No.32361 of 2022 in W.P.No.32960 of 2022, held that a minor penalty is to be charged in case of interception & detention under Section 129, if there is no intent to evade the payment of Tax and consequently no revenue loss to the Department.
The Petitioner filed the writ petition before the Hon’ble High Court challenging proceedings dated 02.12.2022, bearing reference GDN No.4554/22-23/OR No.4554/22-23 initiated by the respondent under Section 129(3) of the Central Goods and Service Tax Act, 2017 read with section 20 of Integrated Goods and Service Tax Act, 2017.
Facts of the Case: –
- That a truck bearing Registration No.TN28-AQ-9203 which was carrying a consignment described as ‘Angles’ from Gummidipoondi to Ranipet was intercepted early in the morning about 04.00 am at Walaja toll.
- That after interception, the truck with consignment was detained only on the ground that the E-Way Bill had expired.
Petitioner’s Submissions: –
- On the behalf of the petitioner, referring to Rule 138(10) of the CGST rules, it was submitted that the second and third proviso provide for extension of E-Way Bill within 8 hours from the time of expiry. Though, in the instant matter e-way bill expired at 23.59 hours on 01.12.2022, and at the time of interception, 8 hours therefrom had not elapsed.
- It was submitted that the extension of e-way bill could not be done though the writ petitioner had a good four hours from the time of detention, as at the time of interception, the portal was blocked.
Respondent’s Submissions: –
- Referring to order dated 25.08.2022 in W.P. No. 18753 of 2022, it was submitted that the owner of the consignment should come before the Writ Court and not the transporter.
- It was submitted that the respondent is the proper officer in the aforesaid proceedings and it passed an order yesterday i.e., 08.12.2022 for payment of penalty of Rs. 6,76,764/-.
- The Hon’ble Court after considering the submissions made and facts of the case, found that it is quite evident from the submissions made and facts of the case, two points needs to considered in the present matter (i) break down of truck carrying consignment, repair and consequent delay; (ii) portal being blocked without having a access to renew E-Way Bill though four more hours to do so was available at the time of interception of truck.
- It was found by the Hon’ble Court that both the above points do not find favour with the second respondent. With respect to first point, it is stated that driver of the truck carrying the consignment did not mention about breakdown and repair. As regards the second point, though there is no mention about portal being blocked, it has been mentioned that no steps have been taken for extending the E-way bill.
- Further on perusal of the order dated 25.08.2022 in W.P.Nos.18753 of 2022, relied upon by the respondent, it was found by the Hon’ble Court that the order passed by Hon’ble Single Judge pertains to cases where the goods transported were not accompanied by documents, the documents accompanying the consignment were deficient and, in another case, where there were alleged discrepancies in the e-way bill and the document and therefore this 25.08.2022 order made in TCI Freight Vs. The Assistant Commissioner and another is distinguishable on facts.
- The Hon’ble Court thereafter, found it appropriate to refer to the case of Padma Sundara Rao Vs. State of Tamil Nadu reported in (2002) 3 SCC 533, wherein it was held & observed that ‘Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed.’
- It was found by the Hon’ble Court that from the careful perusal of the facts and circumstances of the case, there is no doubt that there would have been no revenue loss to the respondent / State if the truck had reached the destination without being intercepted.
- The Hon’ble Court referred to Para 10 (Circumstances where penalty Up to Rs. 5,000/-) of the Circular No. 10/2019, Q1/17253/2019 dated 31.05.2019, pertaining to GST enforcement and has been described as ‘a new approach’ to be followed with effect from 01.06.2019, which states and clarifies that ‘where the movement of goods is accompanied by any one of the basic documents such as invoice or bill of supply or delivery challan or E-way bill as prescribed in Rule 55 A and 138 A of the TNGST Rules 2018, and in such cases where at least one of the basic documents, manifestly showing sufferance of tax in the particular transaction is available, a penalty of up to Rs.5000/- per act shall be levied so as to deter the recurrence of offence.’
- It was observed that Example 2 in para 10, very clearly mentions the expiry of E-Way Bill does not create a scope for evasion and in the absence of evasion, there can be no revenue loss. Further, it has been made clear that in cases of such nature penalty up to Rs.5,000/- per act shall be levied. This may have to be read with Section 125 of CG & ST Act, which is residuary in nature and states that the penalties which do not find a place in (xxi) categories in sub-section (1) of Section 122.
The Hon’ble Court with the above findings, discussions & assuming there was no breakdown and assuming the portal was active, set aside the impugned order dated 08.12.2022 bearing reference GDN No.4554/2022-23 made by the second respondent as well as the impugned proceedings dated 02.12.2022 with the direction that the petitioner shall pay a penalty of Rs. 5,000/- as per paragraph of 10 of the said Circular dated 31.05.2019. Further, on payment of penalty, the second respondent shall release the truck bearing Registration No. TN28-AQ-9203 immediately with the consignment.