GST: Tripura High Court releases Machinery detained due to Expiry of E-Way Bill [Read Order]

Tripura High Court - Machinery - E-Way bill - Taxscan

The Tripura High Court released the  Machinery detained due to the expiry of the E-Way bill on an undertaking that if any tax or Penalty is crystallized the same would be discharged.

The petitioner, NE Equipment Solutions Pvt. Ltd. is a company registered under the Companies Act and is engaged in the business of dealing in TATA Hitachi Construction Machinery. In the course of the business, the petitioner sold one TATA Hitachi Hydraulic Excavator to one Satya Sundar Das of Khowai. The cost of machinery on which IGST was collected from the purchaser and duly declared in the sale invoices. The excavator was being transported from Silchar to the head office of the petitioner company at Agartala under a properly generated e-way bill with a validity period.

The machinery was being transported in a truck trailer and started its journey from Silchar. When the transport vehicle reached at Churaibari check post in the early morning hours, the transport department of the State of Tripura detained the vehicle on the ground that the excavator had no registration in the State of Tripura which was violative of Section 192A of the Motor Vehicles Act. Eventually, the transport authority released the order of detention upon the petitioner paying a fine. In the meantime, however, the validity of the e-way bill had expired. The vehicle was now intercepted by the GST authorities at Churaibari check post on the ground that the driver did not have a valid e-way bill for the machinery being brought within the State. According to the petitioner, a fresh e-way bill was also generated, however, the authorities refused to accept the same as a valid document for passage. The Superintendent of Taxes, Churaibari Enforcement Wing issued a show-cause notice to the petitioner under section 129(3) of the Central Goods and Services Tax Act and the State Goods and Services Tax Act calling upon the petitioner why unpaid tax with penalty totaling Rs.17,87,796/- should not be recovered from the petitioner. At that stage, the petitioner has approached the Court primarily for the release of the machinery.

The division bench of Justice Arindam Lodh and Justice Akil Kureshi noted that the machinery costs nearly half a crore of rupees on which the Government revenue has already earned substantial tax. Detaining such machinery at the check post would expose it to deterioration particularly in the present season of heavy rainfall. The purchaser of the vehicle would also suffer gross inconvenience because having paid more than fifty lakhs of rupees for the purchase of the machinery he would not get the delivery of it for an indefinite period of time.

Therefore, the Court ordered the release of the machinery upon the petitioner filing an undertaking before this Court that eventually subject to appeal and further right to challenge the order of assessment, if any tax or penalty liability is crystallized, the petitioner would discharge the same.

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