Usha Martin Limited vs The Deputy Commissioner of State Tax, Durgapur Range

In a complex legal case involving goods damaged during loading onto a vessel, which necessitated their return to the appellant’s factory for repair, several legal proceedings took place. Initially, an e-Way Bill was generated based on a challan for this purpose. However, the e-Way Bill expired during transit, leading to the detention of the goods. The appellant, aggrieved by the subsequent order confirming the imposition of 100% tax and penalty, filed an appeal.

Upon review, it was established that the goods, owned by Usha Martin Ltd and intended for export, were damaged and returned for repair with an e-Way Bill indicating no tax payable. Nonetheless, the goods were detained just after the expiry of the e-Way Bill’s extension period, resulting in the Department levying 100% Tax Penalty.

Subsequently, the appellant challenged this decision by filing an appeal, which was confirmed by the appellate authority. After nearly two years, the appellant filed a writ petition (WPA 10856 of 2022) against this decision, citing the delay due to the anticipated constitution of a Tribunal to address their grievance, which did not materialize.

However, the writ petition was dismissed by the learned Single Bench on 22-Jun-2022. Meanwhile, Usha Martin Ltd also sought condonation for a 320-day delay in filing an intra-court appeal (CAN 1 of 2023), which was granted by the court due to a bona fide explanation for the delay.

In its deliberation, the court examined past cases with similar circumstances and concluded that Usha Martin’s actions did not indicate an intention to evade tax. Consequently, considering the unique facts of the case, the court deemed the levy of tax and penalty inappropriate.

As a result, both the intra-court appeal and the writ petition were allowed, leading to the setting aside and quashing of the orders impugned in the writ petition.