Imposition of Tax / Penalty is Harsh and Unsustainable on Mere Procedural Lapse: GST Appellate Tribunal [Read Order]

The Himachal Pradesh Appellate Authority of GST observed that the Imposition of Tax/Penalty is harsh and unsustainable on mere procedural lapse under section 129 of the GST Act.

The appellant Bhushan Power & Steel Limited is a registered company having its manufacturing plant. The appellant in pursuance to orders for the purchase received from M/s Engineer-in-Chief, Irrigation & Public Health, Shimla, Himachal Pradesh.

While supplying steel tubes Galvanized pipe (Round) to the aforesaid purchaser, generated the Invoice and accordingly consigned the goods to Irrigation & Public Health, delivery at Anni, Himachal Pradesh through vehicle no. of M/s Zinka Logistics Solutions Pvt. Ltd.

The appellant accordingly generated E-way bills with validity up to 20-11-2018. The goods in question started its movement from Thelkoloi, Odisha  The goods reached at Chandigarh on 20-11-2018 and transhipment took place at Chandigarh and new vehicles were arranged by the branch of the appellant for further movement of goods from Chandigarh to Anni. Himachal Pradesh as the driver of original vehicles was not in a position to drive the vehicle in hilly terrain.

The branch of the appellant arranged the local vehicle from Chandigarh itself and accordingly an entry to the said effect was 6.

The Assistant Commissioner of State Taxes & Excise, checked the stationery vehicle loaded with steel tubes Galvanized pipe (Round) at Khalini and telephonically required the driver of the vehicle to reach a spot where the truck was parked. The officer examined the documents and found the E-way Bill with expired validity.

The Assistant Commissioner of State Taxes and Excise, Shimla, after taking the contact details from the driver of the vehicle informed the present appellant about the expiry of the E-way Bill. The appellant enquired from the driver about a delay in the movement of goods as there was enough time to reach the destination from 1st November to 20th November 2018.

The driver in-turn informed the appellant that the journey couldn’t be resumed earlier on account of occupancy in festive time. He further informed that he was under the impression to cross the state barrier before the expiry of E-way-Bill.

The appellant appeared before the respondent authority and explained his bonafide and requested to release the vehicle in accordance with the provisions of the GST Acts. The Respondent, however, rejected the claim and demanded an amount of Rs.3,80.272/-  as tax.

The Order was delivered by Rohit Chouhan, Additional Commissioner based on an appeal filed by Bhushan Power & Steel Limited.

Rule 138(10) says that the validity of the e-way bill may be extended within 8 hours from the time of its expiry but in the instant cases the vehicle was practically apprehended in almost 08 to 09 hours of the expiry of the e-way bill.

The Additional Commissioner observed that the appellant has been not given a reasonable opportunity to update the Part-A of the e-way bill. It was noted that Part-B of the e-way bill was duly filled which puts to rest on any doubts about the intention of the appellant to evade tax.

Section 68 of the CGST/HPGST Act read with rule 138-A of the Central Goods and Services Tax (CGST)Rules, 2017 required that the person in charge of a conveyance carrying any consignment of goods of value exceeding Rs. 50,000 should carry a copy of documents viz, invoice/ bill of supply/ delivery challan/ bill of entry and a valid e-way bill in physical or electronic form for verification.

Further,  noted that the non-furnishing of information in Part-B of FORM GST EWB-01 amounts to the e-way bill becoming not a valid documents for the movements of goods by road as per explanation (2) to rule 138 (3) of CGST/HPGST Rules, except in the case where the goods are transported for a distance of up to 50 kilometers within the state or Union territory to or from the place of business of the transporter to the place of business of the consigner or the consignee and becoming not a valid document.

While the imposition of penalty of Rs one thousand, Asst. Commissioner State Taxes & Excise-cum-Proper Officer also said that in case a “consignment of goods is accompanied with an invoice or any other specified document and also an e way bill, proceedings u/s 129 of the GST Act may not be initiated. Therefore, in my opinion, the imposition of tax/ penalty by the respondent is harsh and unsustainable”.