The High Court of Kerala ruled that the agent is bound to consider the explanation offered by the petitioner for the expiration of the electronic freight bill.
J’s unique benchustice Gopinath P found that the agent rejected the explanation given by the claimant indicating that no evidence of ongoing repairs had been produced. The agent imposed a penalty/tax on the grounds that the petitioner had ample time to revalidate the E-way invoice.
The petitioner carries out a freight transport activity. He has an agreement with M/s. Tata Motors Limited for the transport of commercial and passenger vehicles and chassis, which are driven to various destinations as required by this company. The petitioner, at the request of M/s. Tata Motors Limited, has transported a new dump truck (the cargo) from Tamil Nadu to Kozhikode, Kerala. The vehicle was intercepted and detained by the Deputy State Revenue Officer of the GST Department of Kerala, and a show cause notice was issued on 9.7.2019 at 12:20 p.m. It was found that the e-way invoice expired on 8.7.2019.
The claimant applied to the High Court and the truck was released on presentation of a bank guarantee. In accordance with the instructions of the Court, the opinion was judged and an order was issued on 16.8.2019, imposing a sanction on the applicant as well as a request for IGST. The petitioner preferred to appeal the order under Article 107 of the CGST/SGST laws.
The appeal was filed by the applicant. The department said the appeal could not succeed because the petitioner had not paid any admitted tax and there had been no pre-deposit of 10% of the disputed tax. The stamp paper equivalent to 1% of the disputed tax was not returned to the legal aid fund.
The petitioner argued that there was no warrant to impose a sanction on the petitioner. There was no suppression or tax evasion. The e-way invoice was valid until 23:59 on 8.7.2019 and the vehicle was intercepted the next day. Although the motion in brief stated that the vehicle was stopped at 00.20 on 9.7.2019, it was clear that the detention took place at 12.20 on 9.7.2019. The vehicle had failed to pass the checkpoint on 8.7.2019 itself because it had developed mechanical problems on the way to Kozhikode and had to be taken to a workshop.
The Ministry argued that the applicant could not have been authorized to continue the transport without extending the validity of the electronic invoice, as provided for in Article 138 (10) of the CGST Regulation. Although there is an enabling provision, the transport could not have continued without extending the validity of the electronic consignment note.
The question raised was whether the imposition of a major penalty accompanied by an IGST request was justified on the grounds that the e-mail invoice had expired..
The court found that all the documents as well as the e-invoice were available at the time of detention and that no discrepancies were found with regard to the documents, except for the expiry of the e-invoice. There was no conclusion that there was an attempt at tax evasion.
Case Title: Sanskruthi Motors v Co-Commissioner (Appeals) II
Reference: WP(C) NO. 17223 FROM 2022
Citation: 2022 LiveLaw(Ker) 458
Counsel for the Applicant: Lawyers V.Premchand, Surya Mohan P. Counsel for the Respondent: Lawyer DR. Thushara James
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