Ram Charitra Ram Harihar Prasad VS State Of Bihar

The petitioner has filed a grievance against an order dated May 7, 2019, issued by the Deputy Commissioner of State Tax for the Kishanganj Circle in Kishanganj. This order was made under the authority granted by Section 68(3) of the Bihar Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the Act’), in conjunction with Sections 129(1) and 129(3) of the same Act. Additionally, the Deputy Commissioner’s actions were guided by the Bihar Goods and Services Tax Rules, 2017, and the relevant rules framed thereunder.

According to the order, the petitioner has been assessed a tax liability amounting to ₹2,30,722. Alongside this, an equal amount of ₹2,30,722 has been imposed as a penalty, resulting in a total financial obligation of ₹4,61,444. This financial burden stems from the alleged breach of the provisions set forth in Section 68 of the Act, read in conjunction with Section 129.

Section 68 of the Act mandates compliance during the transportation of goods, stipulating that any movement of goods in violation of the provisions or the rules established under the Act could lead to detention and seizure.

Furthermore, Section 129 outlines the conditions under which such goods can be released, which generally involves fulfilling the obligations specified under the Act, including payment of any applicable tax and penalty.

In this context, the Deputy Commissioner issued a demand notice to the petitioner for the aforementioned amount due to an alleged contravention of these statutory provisions. The order implies that the goods in question were transported in a manner that did not adhere to the requirements set out by the Act or the rules, prompting the imposition of both the tax liability and the penalty.

The petitioner disputes this imposition and seeks redress through legal channels, contending that the order and the consequent financial implications are unjustified. The case has been brought before the Patna High Court under CWJC No.11221 of 2019, dated August 6, 2019, seeking relief and questioning the legality of the actions taken by the Deputy Commissioner in this matter.

The case centers around the transportation of tax-paid goods from the district of Vaishali to the district of Kishanganj. An E-WAY BILL was generated on April 18, 2019, in compliance with Section 138 of the relevant Act, which was valid until April 22, 2019. Despite the consignment reaching Kishanganj within the validity period of the original E-WAY BILL, the vehicle transporting the goods was still in transit after the expiration date, leading to its seizure and detention by the Kishanganj Commercial Taxes Department under Section 129 of the Act. This action prompted the initiation of legal proceedings, recorded under case number 18 of 2019-2020, as detailed in the counter affidavit submitted by the respondents. In response to the situation, the petitioner promptly generated a fresh E-WAY BILL on April 26, 2019, at 6:16 AM, to cover the extended transportation period. This new E-WAY BILL was acknowledged in the Deputy Commissioner’s order of the same date. The legal dispute over the seizure was brought before the Patna High Court in case CWJC No.11221 of 2019, with the court hearing held on August 6, 2019.

The case involves the detention of a vehicle and its goods following an issue with the E-WAY BILL. On April 27, 2019, the Deputy Commissioner, upon noticing the expiration of the original E-WAY BILL, issued an order for the detention of both the vehicle and the goods it was carrying. This order of detention is documented in Annexure-2 of the writ petition. The legal proceedings that followed led to a summary order dated May 7, 2019, detailed in Annexure-5. In this summary order, the Deputy Commissioner of State Taxes, Kishanganj, assessed the tax liability for the goods on the vehicle at Rs. 2,30,722. Alongside this tax liability, an equal penalty was imposed, resulting in a total demand of Rs. 4,61,444. The petitioner, disputing this significant financial demand, has sought redress from the court.

In the court proceedings, Mr. Jayanta Ray Chaudhary, representing the petitioner, argued that the entire process leading to the vehicle’s detention and the associated tax and penalty demands was not in accordance with the statutory provisions set out in Sections 68, 129, and Rule 138, as amended by the state through a notification dated March 7, 2018. Mr. Chaudhary contended that these provisions allow for the validation of an E-WAY BILL by the consignor, and thus, the subsequent generation of a fresh E-WAY BILL on April 26, 2019, should have been considered valid for the period of transportation, rendering the initial seizure unlawful.

On the other hand, Mr. Vikash Kumar, representing the respondent authorities, defended the impugned order by arguing that since the E-WAY BILL had expired by the time of the vehicle’s seizure, the subsequent issuance of a new E-WAY BILL on April 26, 2019, could not retroactively validate the transportation that had already been deemed non-compliant. He emphasized that Section 129 of the Act, which was cited in the proceedings, includes a non-obstante clause that gives it overriding effect over other rules, thus supporting the validity of the detention order. Mr. Kumar further argued that the Deputy Commissioner had issued the order after providing the petitioner with due opportunity, as evidenced by the proceedings detailed in Annexure-A to the counter affidavit, and therefore, the order was consistent with legal requirements and free of procedural faults.

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