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04 Mar 2022

Expiry of E-way bill cannot amount to levy of Penalty considering it as Tax Evasion

Once again stand taken on section 129 of Goods and Service Act 2017, recently, Hon’ble Calcutta High Court in the matter of penalty levied under section 129 on the ground of expiry of e-way bill in the case of Ashok Kumar Sureka vs. Assistant Commissioner, State Tax, Durgapur Range, Government of West Bengal WPA no. 11085 of 2021 vide order dated 01.03.2022, has revoked the order and allowed refund of penalty and tax paid on protest subject to compliance of all legal formalities as penalty cannot survive only and only for technical breach. Willful and deliberate violation with intention to evade tax is necessary for imposing penalty

Section 129 provides for the basis relating to detention of goods or conveyances or both in case of certain defaults under GST law.

Detention means keeping or holding back either by force or otherwise; Confiscation means to appropriate to the Government account. Seizure means to take forcible possession of. If a person contravenes any provision of the Act or Rules while transporting or storing goods during transit, then such goods and the conveyance in which such goods are carried and all the documents relating to such goods and conveyance can be detained or seized. if validity of e-way bill expires, the goods are not supposed to move

The proper officer after detaining and seizing the goods and/or conveyance has to provide proper opportunity to the transporter or such other person to explain his case by issuing a show cause notice to him. After hearing the transporter, the officer shall pass an appropriate order.

In the writ petition, petitioner has challenged the impugned order of appellate Commissioner  dated 18th March 2021, confirming the original order dated September 11, 2019 passed by adjudicating authority under section 129 of West Bengal Goods and Service Act 2017, for seizure of goods on the ground that the e-way bill has expired one day before i.e. in midnight and goods were seized on next day morning and extension could not be made and petitioner submit that delay of few hours was not deliberate or willful and was due to breakdown of vehicle and there was no intention of evasion of tax, said by petitioner.

Advocate Appearing for the Respondent tried to overrule the case but could not make out a case against Petitioner that the aforesaid violation was willful and deliberate or with a motive to evade tax

The petitioner in support of his contention has relied on decision of the Hon’ble Supreme Court dated in the matter of ACST v. M/s Satyam Shivam Papers Pvt. Limited. Dated January 12, 2022 passed in Special Leave Appeal (C) No(s). 21132/2021 and set aside the order of appellate authority and allowed to refund the amount deposited for release of vehicle.