The Allahabad High Court has ruled that, Goods receipt or bilty is valid in the pre-implementation period of E-Way Bill.
The Court also said that, State Government has no authority to issue an e-way bill in respect to such transactions, therefore, he says that the seizure as also penalty imposed is not sustainable in law.
In Mudassirun Nisan M/S M.N. Agencies v. Addl. Commissioner Grade-II Appeal-I Trade Tax Prayagraj & Anr, the Court ruled that the ‘Government’ Under Rule 138 of the CGST Rules 2017, pertaining to inter-state transactions, refers to Central Government. The judgement was rendered by Justice Rajan Roy.
A Transport vehicle carrying 230 bags of areca nut was intercepted at the border of State of U.P. by the Assistant Commissioner when the goods were being imported from outside the State. The driver was found not to be in possession of the e-way bill. The goods were seized and on the same day in the night, the State e-way bill was produced.
The petitioners relying on a division bench order pointed out that ‘Government’ referred in Rule 138 of the C.G.S.T. Rules 2017, was the Central Government. The said government has not developed and approved any e-way bill system nor had any other arrangement been made by the GST Council. The counsel further argued that the e-way bill system was prescribed by the Government of India only by a notification dated 7th March 2018. Pointing out that the present case is an inter-State transfer the provisions of C.G.S.T. Act 2017 were applicable and the State Government i.e. the Government of U.P. had no authority to issue an e-way bill in respect to such transactions, hence the seizure as also penalty imposed is not sustainable in law.
The petitioner also relied on another Division Bench judgment rendered in the case of Shaurya Enterprises v. State of U.P. and ors. in Writ Tax No.563 of 2018 wherein also it has been observed that till March 31, 2018 it was not mandatory to download the e-way bill from the official website and the said requirement was effective from 1st April, 2018.
The court held that, “Cross-empowerment under section 4 of I.G.S.T. Act 2017 and section 6 of C.G.S.T. Act 2017 merely means that State Authorities empowered under the U.P.G.S.T. Act 2017 can also enforce the provisions of C.G.S.T. Act 2017 or I.G.S.T. Act 2017, but it does not mean that they can apply the provisions of U.P.G.S.T. Act 2017 or Rules made thereunder to cases of inter-State trade in violation of section 20(xv) of I.G.S.T. Act 2017”.
Court further clarified that, Cross-empowerment does not mean that “the State Government can issue a notification under Rule 138 of U.P.G.S.T. Rules made under U.P.G.S.T. Act 2017 to prescribe documents to be carried in an inter-state supply of goods and services regarding which only the Central Government has the power under section 20(xv) of I.G.S.T. Act 2017 read with section 68 of C.G.S.T. Act 2017 and Rule 138 of C.G.S.T. Rules 2017”.
The Court relying on the judgement in Writ Petition No.5536 (MB) of 2018, Satyendra Goods Transport Corp. v. State of U.P. & Ors. held that on the date of interception of the vehicle in question E-way Bill System had not been developed, nor the documents which were required to be carried during movement of any consignment of goods as to be notified by the Central Government under Rule 138 of the C.G.S.T. Rules 2017 was not notified. Accordingly, the very basis for passing the impugned orders and taking action against the petitioner as impugned herein is apparently erroneous and illegal.
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