The Calcutta High Court held that goods meant for exports were taken back to the factory for repair not a case of tax evasion.
Usha Martin Limited, the appellants challenged the order passed by the Single Bench dated 22nd June 2022 in WPA 10859 of 2022. The writ court had dismissed the writ petition filed by the appellants challenging the order passed by the appellate authority dated 20th July 2022 confirming the order of levying 100% tax and penalty.
On the ground that the appellants had approached the writ court almost after two years after the appellate authority had passed the order. The explanation given by the appellants is that the appellants, being aggrieved by the order passed by the appellate authority were entitled to go before the Tribunal.
Since a Tribunal was not constituted, the appellants were advised to await the Constitution of the Tribunal and thereafter since the Tribunal was not constituted for almost two years, the appellants were advised to file the writ petition. In any event, the appellants had already paid the tax and penalty and therefore, we are of the view that the matter can be decided on merits.
The undisputed facts are that the goods in question were meant for export and the appellants had generated an e-Way Bill which was valid till 12th September 2019.
The appellant’s case is that the goods while being loaded into the vessel and had got damaged and as a result, the goods had to be taken back to the appellant’s factory at Ranchi for repairs. For such purpose, the e-Way Bill was generated based on a challan on 7th September 2019 which was valid till 12th September 2019.
On perusal of the e-Way Bill, it is seen that no tax was payable since the goods which were owned by the appellants were taken back to their factory at Ranchi for repairs. The goods were detained while in transit at about 8.20 a.m. on 13.09.2019. In terms of Rule 138(10) of the WBGST Rules an option is given to the assessee to extend the period of e-Way Bill and such extension should be done before eight hours and after eight hours of the expiry of its validity. Admittedly the eight-hour period expired at about 8.10 a.m. on 13.09.2019 and at about 8.20 a.m. the goods were intercepted and detained.
The Court Comprising Chief Justice T. S. Sivagnanam and Justice Uday Kumar considered the conduct of the assessee and having found that the conduct was not with the intention to evade tax, granted relief to those assessees. The case on hand also would fall under the said category since there is no allegation of any evasion of tax rather it is not disputed that the goods were being transported under a cover of challan to the factory of the appellants for carrying out repairs. The appeal as well as the writ petition was allowed and set aside the impugned order.
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