Case Details : GST- Detention of goods due to of non-generation of Part-B of the E-way bill
Case Related To : BHARTI AIRTEL LTD
Declared By : Uttar Pradesh - Case Law on 19th October 2022
What Happened Exactly :
- The petitioner is a company and has a warehouse situated at Lucknow as well as at Haryana Gurgaon.
- The company for the purposes of transportation of the goods from Lucknow to Haryana hired a transporter for transporting the said goods.
- A bilty tax invoice i.e. consignment note and Part-A of the e-way bill were generated.
- The petitioner paid the tax as were required under the IGST Act, however, on account of an inadvertence Part-B of the e-way bill was not generated prior to the commencement of the transport of goods.
- The driver commenced the journey on 24.09.2018 at 9.30 pm from the warehouse of the petitioner company and was intercepted on 25.09.2018 at 4.43 am.
- The case of the petitioner’s company is that although the Part-B of the e-way bill was not generated, the same was attributable to the transporter, however, before the goods were actually seized, the e-way bill was generated at about 7.34 am in the morning on the next date i.e. 25.09.2018.
- It is stated that despite the fact that the petitioner had uploaded the Part-B of the e-way bill at about 7.34 am, the authorities proceeded to pass a detention order on 29.09.2018 mainly on the ground that till 4.43 am on 25.09.2018, the Part-B of the e-way bill had not been generated.
- A show cause notice was issued to the petitioner company on 29.09.2018 whereby the petitioner was called upon to show cause as to why the proposed tax and the penalty may not be levied against the petitioner.
- The petitioner submitted a detailed reply to the show cause notice and prayed that the show cause notice be dropped mainly on the ground that the tax was duly paid as was required under the Act and the Part-B of the e-way bill was also uploaded prior to the passing of the detention order.
- . Despite the submission of the reply, the department without considering the same imposed a tax liability and levied an equal penalty by means of an order dated 17.10.2018.
- The petitioner filed appeal, but it was dismissed.
- Aggrieved petitioner filed this petition. Petitioner’s case is that in terms of the mandate of section 129, the proper officer is neither authorized nor justified in determining the tax or imposing the penalty and thus, the impugned orders are liable to be set aside.
Court's Decision :
- Section 129 of the CGST Act can be equated with an alternative dispute redressal mechanism and provides an opportunity to the owner of the goods or any other person to pay amounts as specified under section 129 (1)(a) or (b) or (c) of the Act.
- . Under the scheme of the CGST Act, the procedure for determination of tax and penalty is contained in Chapter XV read with section 122, 123, 125, 126, 127 and 128 of the Act and a parallel procedure is prescribed under section 129 of the Act in case of goods, which are in transit.
- In the present case, the department has proceeded to determine the tax liability as well as penalty only under the provisions of Section 129 of the Act, which is not contemplated or intended.
- There is no provision under section 129 for determination of tax due, which can be done only by taking recourse to the provisions of Section 73 or 74 of the CGST Act, as the case may be.
- As the proceedings have been initiated and concluded only under section 129 and the owner of the goods has not come forward for payment of such penalty as has been determined, the entire action of determining the tax and penalty under section 129(1) is not legally substitutable.
- The amount paid by the petitioner for release of the goods shall be refunded to the petitioner with all expedition.
- The impugned orders are set aside and writ petition is allowed.