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26 May 2021

Whether non generation of Part B of E-way Bill at initial stage be a reason for detention of perishable goods?

In the case of Neuvera Wellness Ventures Pvt. Ltd. vs State of Gujarat, cited in [2019] 105 taxmann.com 212 (Gujarat) petitioner is engaged in import and sale of dietary food products such as protein powder. In regards to the import transactions, the petitioner has rightfully paid customs duty as well as integrated goods and services tax (hereinafter referred to as "IGST"), payable on such imports before clearance for home consumption. The petitioner had imported consignments of Whey Protein Powder under four different invoices and warehousing bills of entry were filed for such imports. Thus, the imported goods were kept in customs bonded warehouse of the petitioner and thereafter such goods were cleared by the petitioner for home consumption.

On successful payment of custom duty as well as IGST, the goods were transported to godown. The petitioner uploaded four separate E-way bills in Part A, but Part-B of these four E-way bills was not generated by the transporter due to some technical problem. However, since the goods were of perishable nature, the transporter did not wait for Part-B of the E-way bills. The second respondent pulled over the truck transporting the goods for verification.

The transporter had duly produced all documents relating to the goods, including the four bills of entry for home consumption evidencing payment of IGST on the transaction. Truck and the goods were detained by the second respondent on the ground that Part-B of the E-way bills was not generated.

The petitioner immediately generated Part-B of the E-way bills in respect of the transactions and approached the second respondent and gave explanation wherein it was submitted that the goods being perishable in nature and due to urgency of transporting the goods, the transporter had commenced transportation of goods immediately on clearance by the customs authorities without waiting for Part-B of the E-way bills.

It was also submitted that the imported goods were taken by the petitioner to its own godown directly from the bonded warehouse and, therefore, it was not a transaction for supply in respect of which goods and services tax (GST) would be leviable and that IGST had already been paid on the transaction even before the commencement of movement of the goods.

The learned court on hearing both sides quashed the impugned order and asked the respondent to start afresh after giving opportunity of being heard to the petitioner. However, the goods of the petitioner being perishable goods, it would not be just, proper and reasonable to keep such goods under detention any longer. Under the circumstances the petitioner would be entitled to the release of the conveyance as well as the goods in question subject to compliance of clause (c) of section 129(1) of the Act. Furthermore, the court clarified that the security/bond was only for the purpose of granting immediate relief keeping in mind the perishable goods of the petitioner and it shall not be construed as if this court has expressed any opinion that the petitioner is liable to pay such amount of tax and penalty. The liability of the petitioner shall be considered independently on the basis of the submissions produced by the learned advocate for the petitioner.