No need to Generate E-way Bill when Consignment Value does not Exceed Rs. 50,000/-: Calcutta HC sets aside GST Penalty [Read Order]

In a significant case, the Calcutta High Court set aside the penalty demanded under the Central Goods and Service Tax ( CGST ) Act,2017  as there is no need to generate an e-way bill when the consignment value does not exceed Rs.50,000/-. The Court directed the petitioner to disclose all documents in connection with the job work for the proper officer to identify the transaction value of the goods/consignment.

Gopal Nondy, the petitioner challenged the order passed by the appellate authority under Section 107 of the WBGST / CGST Act, 2017. The petitioner is the proprietor of Arpan Enterprise and is registered under the provisions of the said Act. The petitioner claims to have received certain orders from M/s Apex Auto Private Limited having its place of business outside the State of West Bengal at Jamshedpur (principal) for executing certain job work in respect of certain “Railway Component” (“consignment”). Contract executed between the petitioner on one hand and the said principal, the petitioner received 22 pieces of consignment aggregating an invoice value of Rs.5,92,623.20/- from the said principal against two separate purchase orders dated 4th November 2022 and 21st November 2022 respectively.

The consignment was transported from Jamshedpur to the petitioner’s place of business in the State of West Bengal through a transporter namely, CARCA Rapid Solutions Private Limited under two separate e-way bills both dated 23rd November 2022, for invoice amount of Rs.96,509.30/- and Rs.4,96,113.90/- respectively aggregating to Rs.5,92,623.20/-.

The consignment was detained only on the ground that the documents tendered were found to be defective and that no e-way bill was produced for movement of the goods in question.  On a physical verification conducted on the said date, no other discrepancy apart from what was indicated in the detention order was identified by the respondents. The same was followed by an order under Section 129(3) of the said Act dated 27th November 2022, where the proper officer had determined the penalty payable by the petitioner.

The petitioner had obtained the release of the aforesaid consignment by making payment of penalty in terms of Section 129(1)(a) of the said Act and consequent thereon an order dated 29th November 2022 was passed, releasing the consignment and the conveyance which had been so detained. The petitioner has subsequently preferred an appeal challenging the said order dated 29th November 2022, determining the penalty payable by the petitioner in terms of Section 129 of the said Act. The said appeal was rejected by confirming the order passed by the proper officer.

It was contended that since the transaction value did not exceed Rs.50,000/-, the petitioner was, therefore, not required to generate e-way bill. This aspect was completely overlooked both by the proper officer as also by the appellate authority while passing the orders impugned.

Rule 138 of CGST/WBGST Rules 2017 (“said Rules”) states that an e-way bill is required to be generated provided the consignment value exceeds Rs.50,000/-. Since the consignment value did not exceed Rs.50,000/-, no e-way bill was generated. There is no irregularity on the part of the petitioner in not generating the e-way bill and the consignment not being accompanied by an e-way bill. This aspect was not properly considered both by the proper officer as also by the appellate authority.

On the other hand, Advocate appeared for the respondents and submitted that the arguments canvassed by the petitioner before the Court are not supported by proper disclosure. The job work contract has not been disclosed and as such, in the absence of such a job work contract, the proper officer had determined the value of the consignment based on the value of goods and not based on the contract. He, however, acknowledges the fact that the aforesaid issue requires proper consideration based on appropriate disclosure to be made by the petitioner.

The Single bench noted that in terms of Section 15 of the Act where the value of supply of goods or services cannot be determined under subsection (1) of the said Section the same shall be determined as may be prescribed.

Justice Raja Basu Chowdhury remanded the matter back to the appellate authority for redetermination of the aforesaid issue. The Court directed the petitioner to disclose all documents in connection with the job work for the proper officer to identify the transaction value of the goods/consignment.

The court set aside the order passed by the appellate authority. Further held that if the petitioner fails to disclose the documents within the time as specified above, the appellate authority shall hear out and dispose of the appeal on merits in accordance with law.

Mr. Arya Das and Mr. Amit Kumar Shaw appeared for the petitioner. Mr. T.M.Siddiqui, Mr. Tanoy Chakraborty and Mr. Saptak Sanyal appeared for the respondent.

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Gopal Nondy vs Assistant Commissioner of State Tax , 2024 TAXSCAN (HC) 1394 , Mr. Arya Das Mr. Amit Kumar Shaw , Mr. T.M.Siddiqui Mr. Tanoy Chakraborty Mr. Saptak Sanyal