Sri Gopikrishna Infrastructure Pvt Ltd VS The State Of Tripura

The case revolves around a petition challenging Order No.2 dated 27.05.2020 issued by the Superintendent of State Tax, Churaibari Enforcement Wing, North Tripura. This order determined the petitioner’s liability to pay CGST and SGST at the rate of Rs.3,56,990/-. Additionally, a penalty equal to the tax payable was imposed due to the petitioner’s inability to produce a valid e-way bill for the consignment related to invoice No SGIEL/19-20/161. The taxing authority, before imposing this tax and penalty, issued a detailed notice to the petitioner under various sections of the CGST Act, UTGST Act, and IGST Act, asking why proceedings should not be initiated. Except for the absence of a valid e-way bill, there were no disputes regarding other aspects mentioned in the notice, including invoice details and tax rates.

In response to the notice, the petitioner stated that valid e-way bills were generated for two vehicles consecutively, but due to sudden lockdown, they couldn’t bring the consignment into Tripura within the stipulated time. Furthermore, they couldn’t generate a new e-way bill for a new vehicle as the previous one had broken down during the lockdown. Despite attempting to obtain an amended e-way bill, they were unsuccessful as the system refused to generate one after the expiry of the valid time frame. Consequently, when the vehicle was detained at the Churaibari check post, it lacked a valid e-way bill.

The petitioner’s argument primarily revolves around the exceptional circumstances of the lockdown, which prevented them from adhering to the e-way bill regulations. They contend that they made genuine efforts to comply with the requirements but were hindered by technical and logistical issues beyond their control. Therefore, they seek relief from the imposed tax and penalty.

Both the petitioner’s counsel and the additional government advocate presented their arguments before the court. The petitioner’s counsel likely emphasized the exceptional circumstances and the efforts made to comply with regulations despite facing challenges, while the government advocate may have argued for upholding the tax liability and penalty imposed due to non-compliance with e-way bill requirements.

The court will need to assess the merits of both sides’ arguments and determine whether the petitioner’s circumstances warrant relief from the imposed tax and penalty. This case underscores the complexities and challenges businesses faced during the COVID-19 pandemic, particularly regarding compliance with regulatory requirements amidst unprecedented disruptions.

The learned counsel, Mr. Majumder, representing the petitioner, highlighted that the only violation observed by the taxing authority was the absence of a valid e-way bill against the invoice in question. This was evident from the detention order dated 18.05.2020, which cited the lack of an e-way bill as the sole reason for detention under Section 129(3) of the CGST Act, among others.

The order imposing tax and penalty, which the petitioner challenged in the writ petition, was passed after considering the petitioner’s reply filed on 26.05.2020. In the reply, the petitioner explained that the breakdown of the vehicle carrying the goods led to trans-shipment, during which the e-way bill couldn’t be amended due to the COVID-19 situation and the subsequent nationwide lockdown. Despite efforts, the petitioner was unable to amend the e-way bill through the designated portal. However, the details of the goods in transit matched the invoice number and date, the goods specified in the invoice and e-way bill dated 21.02.2020, and the details of the consignee and consigner.

It’s noteworthy that the e-way bill dated 17.05.2020 provided details of the consignment, which were consistent with the last e-way bill generated after the expiry of the e-way bill dated 18.03.2020, although there was a discrepancy in the dates mentioned in the petitioner’s reply. Upon comparing the e-way bill dated 18.03.2020 with the e-way bill valid till 11.06.2020, it was found that there were no changes in the description except for the vehicle number. The petitioner admitted that the omission of generating the e-way bill was their fault, despite their diligent efforts to generate a new e-way bill for the vehicle transporting the consignment to Churaibari.

This summary outlines the petitioner’s arguments, emphasizing the circumstances leading to the absence of a valid e-way bill and highlighting the efforts made to comply with regulatory requirements amidst challenges posed by the COVID-19 pandemic and subsequent lockdown.

Mr. B.N. Majumder, the learned counsel representing the petitioner, argued that if the allegations presented by the respondents were to be fully accepted, any breach would fall under the purview of Section 122(xiv) of the CGST Act, 2017. Section 122 of the CGST Act outlines various scenarios where a taxable person may be liable for penalties. These scenarios include:

(i) Supplying goods or services without issuing an invoice or issuing an incorrect or false invoice.
(ii) Issuing an invoice or bill without supplying goods or services, violating the provisions of the Act or rules made thereunder.
(iii) Collecting tax but failing to remit it to the government within three months from the due date.
(iv) Collecting tax in contravention of the Act but failing to remit it to the government within three months from the due date.
(v) Failure to deduct tax as per Section 51 or failure to pay the deducted amount to the government.
(vi) Failure to collect tax as per Section 52 or failure to remit the collected amount to the government.
(vii) Taking or utilizing input tax credit without receiving goods or services, contravening the Act or rules.
(viii) Fraudulently obtaining tax refunds.
(ix) Taking or distributing input tax credit in violation of Section 20 or rules.
(x) Falsifying or substituting financial records, producing fake accounts or documents, or providing false information or returns to evade tax payment.
(xi) Failure to register under the Act when liable to do so.
(xii) Providing false information regarding registration particulars during or after registration.
(xiii) Obstructing or preventing any officer from performing duties under the Act.

Mr. Majumder’s argument suggests that any violation alleged by the respondents could be categorized within these provisions, indicating the potential liability of the petitioner. This section delineates various acts or omissions that may attract penalties under the CGST Act, emphasizing the importance of compliance with taxation regulations.

Mr. Majumder, the petitioner’s learned counsel, argued that there was no fraudulent intent or malicious act on the part of the petitioner. He emphasized that the failure to comply with regulations occurred under highly abnormal circumstances of lockdown, which the authorities failed to consider. Additionally, Mr. Majumder contended that the Superintendent of State Tax exceeded his authority in imposing the penalty, as outlined in Section 126 of the CGST Act. He asserted that even the general principles regarding penalty imposition, as delineated in Section 126, were not adequately considered. According to him, the severity of penalties should be proportionate to the mistake made, especially when it is committed without fraudulent intent or gross negligence.

On the other hand, Mr. K. Dey, the learned Additional Government Advocate, argued that although the breach falls under Section 122(xiv) of the CGST Act, the petitioner displayed gross negligence by failing to upgrade or amend the e-way bill when it expired during transit. He pointed out that the e-way bill was only upgraded or amended when the consignment was detained, indicating a lack of diligence on the petitioner’s part. Mr. Dey emphasized that there was no irregularity or disproportionality in imposing the penalty solely for not tendering a valid e-way bill for the vehicle’s movement with goods. He asserted that both the tax and penalty were imposed in accordance with the law.

In response to a query from the court, Mr. Dey candidly admitted that the respondents did not specifically address the petitioner’s claim regarding the payment of tax. This admission suggests that while the respondents focused on penalizing the petitioner for non-compliance, they did not directly refute the petitioner’s assertion regarding tax payment.

This summary encapsulates the arguments presented by both parties, highlighting their respective positions regarding the petitioner’s non-compliance with e-way bill regulations and the imposition of tax and penalties by the taxing authority. The contrasting viewpoints of Mr. Majumder and Mr. Dey underscore the complexity of the legal and factual issues at hand in this case.

Download PDF:

For Reference Visit:

Read Another Case Law:

GST Case Law: