PROGRESSIVE METALS PVT LIMITED Vs THE DEPUTY COMMISSIONER, STATE TAX

In a recent legal case surrounding the Goods and Services Tax (GST) framework, a critical issue arose regarding the unloading of goods at a location different from the one specified in the e-way bill. The penalty for such a violation is governed by Section 129 of the Central Goods and Services Tax (CGST) and West Bengal Goods and Services Tax (WBGST) Act of 2017.

The court, in its decision, took into account the absence of any intention to evade taxes by the appellant. The specific rule applicable to this scenario is Rule 138 of the CGST/WBGST Rules, 2017, which allows the transporter a grace period of 8 hours to request an extension for an expired e-way bill.

In the case at hand, the vehicle carrying the goods was intercepted, and it was found that the e-way bill had expired, with a delay of 1 hour and 35 minutes. The court emphasized the need to examine the transporter’s conduct, taking into consideration the provisions of Rule 138, which afford an 8-hour latitude for seeking an extension.

Crucially, the court did not impose any penalty in this instance due to the lack of evidence that questioned the bona fides of the appellant. The court allowed the writ appeal, highlighting the importance of considering the transporter’s adherence to the rule’s provisions when evaluating cases of delayed e-way bills. Ultimately, the outcome favored the appellant, as the court recognized the absence of any intentional wrongdoing and the adherence to the rule’s stipulations.

1. This intra-Court appeal by the writ petitioner is directed against the order dated 6th February, 2023 in W.P.A. 1786 of 2023. By the said order, the learned writ Court declined to grant any interim order, though was inclined to entertain the writ petition and called for affidavits. The appellant being aggrieved by such order, has filed the present appeal.

2. With the consent of the learned counsels appearing on either side, the writ petition is taken up along with this appeal. The short issue involved in the case is whether 200% penalty could have been imposed in terms of section 129 of the WBGST Act, 2017.

3. The appellant was carrying goods, which were consigned to Larsen & Toubro Limited in West Bengal. The e-way bill generated on 7th May, 2022 at 3:46 PM was valid upto 8th May, 2022 11:59 P.M. The goods were shipped to the following address : Kankora, Near Shantiniketan Road, Trilokchandrapur, Bud Bud, Panagarh, Durgapur, Barddhaman, West Bengal-713148. 

4. It is not in dispute that the vehicle along with the goods entered the Durgapur industrial belt within the validity of the e-way bill. The vehicle was intercepted on 9th May, 2022 at 9:35 AM at Durgapur and the vehicle was detained along with the goods on the ground that the e-way bill had expired on 8th May, 2022 at 11:59 AM. The explanation given by the appellant was that it was a Sunday and the consignee had given instructions to unload the goods at a different location within the same area and in this regard the appellant had produced e-mail sent by the consignee stating that they had given instructions subsequently to unload the goods at a different location within the area to which the goods were sent as per the e-way bill. The original authority did not accept the explanation given by the appellant and imposed 200% penalty. An appeal was preferred against the said order to the Senior Joint Commissioner, State Tax, Chowringhee Circle, who by order dated 26th September, 2022 affirmed the order of penalty imposed by the original authority and dismissed the appeal petition. Aggrieved by the same, the appellant filed the writ petition. 

5. We need not go into the various judgments, which were referred to by the learned advocate for the appellant and the learned advocate for the State as we are convinced that on facts, there was no intention on the part of the appellant to evade payment of tax. In any event, in terms of rule 138 of the WBGST Rules, if an e-way bill had expired, the transporter had 08 hours time to seek for extension of the time stipulated in the e-way bill. If that allowance is given, at the time when the vehicle along with the goods were intercepted, it was delayed by about 01 hour and 35 minutes. The particular details given in the e-way bill will show that the area Durgapur has also been mentioned. It is not disputed that the vehicle was within the Durgapur industrial belt though not a Panagarh. Thus, considering the peculiar facts and circumstances of the case and in the absence of any material produced by the revenue to doubt the bona fides of the appellant, we are of the view that penalty should not have been imposed in this case. 

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Progressive Metals Pvt. Limited

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GST Case Law