Calcutta HC Quashes Imposition of Penalty at Rate of 200% as E-Way Bill Satisfied Conditions u/s 129 of CGST and WBGST Act [Read Order]

The Calcutta High Court quashed the imposition of penalty at rate of 200% as E-Way Bill satisfied conditions under Section 129 of the Central Goods and Service Tax, 2017 (CGST) and West Bengal Goods and Services Tax Act, 2017 (WBGST).

The allegation which led to an order of penalty being passed by the respondent authority is that the goods which were being transported by the appellants to Assam were covered by e-Way Bill which was valid upto 18th March, 2022.

According to the appellant, M/s Bitumix India LLP and Anr, on account of the breakdown of the vehicle the goods did not move outside the territory of the State of West Bengal and was stationed at Dankuni. The consignee in the meantime had sold the goods which were in transit to another purchaser in Assam and the goods were transported by the same vehicle after generating a new e-Way Bill. The vehicle was detained and order of penalty has been passed on the ground of first e-Way Bill had not been renewed/extended by the appellants.

Accordingly, a charge under Section 129 of the CGST Act and WBGST Act has been led against the appellants and ultimately resulting an imposition of 200% penalty. The only mistake committed by the appellants is on not renewing the e-Way Bill which expired on 18.03.2022.

A Division Bench of the Calcutta High Court of Chief Justice TS Sivagnanam and Justice Uday Kumar observed that “This in our opinion the appellants should have done since the goods were sold in transit. Therefore, we are of the view that there is a violation had committed by the appellants but the violation is not as grave enough to call for imposition of penalty at the rate of 200%. Since on the date when the vehicle was intercepted the goods were covered by a valid eWay Bill which satisfies the requirement under Section 129 of the CGST and WBGST Act.”

“For the above reasons, the appeal as well as the writ petition are allowed and the order of penalty passed by the adjudicating authority as affirmed by the appellate authority are set aside and modified with the direction to the appellants to pay a penalty of Rs.50,000/- which will include both CGST and WBGST instead of 200% penalty as imposed by the authorities” the Bench concluded.

To Read the full text of the Order CLICK HERE

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