On account of non-extension of the validity of the e-waybill, no presumption can be drawn that there was an intention to evade tax

Issue

Writ petition is filed for the order dt.22.01.2020 passed by the Senior Assistant of the 2nd respondent in Form GST MOV – 09 and levying tax and penalty of Rs.69,000/- on the petitioner, is set aside. For abuse of power by respondent result in violation of Article 14 of Constitution of India.

Facts

• The petitioner is a Private Limited Company registered under the Companies Act, 1956, and carries on trading business in all kinds of paper. It is also registered under the CGST Act, 2017, SGST Act, 2017 and IGST Act, 2017.
• According to petitioner, it is the sole distributor of M/international Papers Limited, Andhra Pradesh, and it also effects inter-State purchases of papers from M/s. Emami Papers Ltd., Orissa and receives supplies of paper from these two companies and submits monthly GST returns on-line and also pays GST payable under the CGST and SGST Act, 2017.
• Petitioner contends that it made an intra-State supply of paper through a tax invoice dt.04.01.2020 to M/s. Sri Ayappa Stationery and General Stores, Station Road, Medchal in Telangana State which is also registered under the GST Act and had also generated an e-way bill dt.04.01.2020 and that the distance to be traveled by the auto trolley was only 36 kms.
• Petitioner alleges that the said auto trolley along with other auto trolleys started for delivery of the paper at 04:33p.m. on 04.01.2020 to the consignee, but on its way to Bashierbagh since there was a political rally opposing CAA and NRC by political parties, the roads were blocked and the traffic could not move forward or backward.
• The driver of the said auto trolley waited till 08:30 p.m. on the road; by that time having realized that the shop of the buyer would be closed, the driver of auto trolley took the goods to his residence with a desire to deliver the goods on the next day.
• The following day 5.1.2020 being a Sunday, the attempt was made by the driver of the auto trolley to deliver them to the buyer on 6.1.2020 when it was detained at 12.35 pm by issuing detention notice dt.06.01.2020.
• Petitioner contends that on 06.01.2020, the auto trolley was on its way for delivery of the paper to the buyer/consignee but it was detained by the Deputy State Tax Officer and a Detention Notice in Form GST MOV-07 dt.06.01.2020 (Ex.P.4) was served alleging that the validity of the e-way bill had expired proposing to impose tax and penalty.
• It was further alleged by the petitioner that the 2nd respondent unloaded the paper boxes at a private premises in the house of 2nd respondent’s relative’s at Marredpally, Secund erabad without tendering any acknowledgment of receipt of detention of the goods in his custody, and released the auto trolley by unloading the goods in such a manner.
• Petitioner alleges that it made representation on 07.01.2020 to the respondent and sought for release of the detained goods by explaining reasons which resulted in expiry of the e-way bill. He also submitted representation on 08.01.2020 by enclosing copy of the Rule 138 of the CGST Rules, 2018 wherein the validity period of the e-way bill for more than 20 kms can be extended for one more additional day and also enclosed copy of the decision rendered by the Allahabad High Court in Writ Tax No.1471 of 2018.
• Petitioner waited for release of the detained goods till 19.01.2020 and since it did not seem likely that the respondent would release the goods in spite of submitting explanation for release, it made payment of (i) Rs.17,250/- under CGST Act, (ii) Rs.17,250/- under SGST Act, (iii) Rs.17,250/- towards penalty under CGST Act and (iv) Rs.17,250/- towards penalty under SGST Act through NEFT, amounting to Rs.69,000/-, and also submitted a letter dt.20.01.2020 in the office of the 1st respondent (Ex.P.7). According to petitioner, some of the paper packets in the boxes had also gone missing in the meantime.

 Findings

This is plainly arbitrary and illegal and violates Article 14 of the Constitution of India, because there is no denial by the 2nd respondent of the traffic blockage at Basher Bagh due to the anti CAA and NRC agitation on 4.1.2020 up to 8.30 pm preventing the movement of auto trolley for otherwise the goods would have been delivered on that day itself. He also does not dispute that 04.01.2020 was a Saturday, 05.01.2020 was a Sunday and the next working day was only 06.01.2020.

There has been a blatant abuse of power by the 2nd respondent in collecting from the petitioner tax and penalty both under the CGST and SGST and compelling the petitioner to pay Rs.69,000/- by such conduct.

The conduct of 2nd respondent in not even adverting to the response given by petitioner to the Form GST MOV-07 in Form GST MOV – 09, and his deliberate intention to treat the validity of the expiry on the e-way bill as amounting to evasion of tax without any evidence of such evasion of tax by the petitioner.

Judgement

Justice Ramachandra Rao and Justice T. Vinod Kumar held that the Writ Petition is allowed; the order dt.22.01.2020 passed by the Senior Assistant of the 2nd respondent in Form GST MOV – 09 and levying tax and penalty of Rs.69,000/- on the petitioner, is set aside. The respondents are directed to refund the said amount collected from petitioner within four (04) weeks with interest@ 6% p.a from 20.1.2020 when the amount was collected from petitioner till date of repayment. The 2nd respondent shall also pay costs of Rs.10,000 to the petitioner in 4 weeks.

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