Single Consignment Goods Cannot be held Stored and in Transit simultaneously; E-Way Bill lacks Godown name: Calcutta HC directs to Refund Penalty Amount [Read Order]

The Calcutta High Court ( HC ) ruled that the amount that had been taken from the petitioner as a fine must be returned and underlined that a single consignment of goods cannot be maintained in storage and be in transit at the same time.

The brief fact is that the goods of the petitioner were seized from a godown upon invoking the provision of Section 67(2) of the GST Act. The e-way bill status of the goods mentions that the e-way bill already expired on the date of inspection and seizure.

The adjudicating authority determined the appropriate punishment in accordance with Section 129 (1) (a) of the Act after opining that the items were transported and stored while they were in transit in violation of Section 129 of the GST Act.

Section 67 can be invoked in respect of goods stored in a warehouse or a godown which has escaped payment of tax or is likely to cause tax evasion.

Section 129 deals with the detention, seizure and release of goods and conveyances, „in transit‟. The said provision is to be invoked when the goods are in movement on a conveyance.

The bench observed that the authority incorrectly utilised the aforementioned clause in order to punish the petitioner because it was unclear under which law the punishment may be imposed.

It was contended that if the goods were inspected and seized in transit then the provision of Section 68 ought to have been invoked and not Section 67, as has been done in the present case.

The bench observed that the goods that were seized from the disputed godown did not carry a valid e-way bill. Further, the bill produced by the petitioner was issued in respect of fifteen thousand kilograms of cumin seeds whereas at the time of seizure, only 12,840 kilograms of cumin seeds were found and failed to submit the document.

Further remarked that the petitioner was certainly at fault in not recording the additional godown at the time of generation of the e-way bill, but at the same time, the petitioner ought not to be penalized with a two hundred per cent penalty for a such trivial offence.

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