#2/Sec68: GST Case Law: Levy of Tax and Penalty for Expiry of E-way bill is Valid.

Appellate Authority - GST, ANDHRA PRADESH

Whirlpool of India Ltd., In re*

Gist:

Where E-way Bill had been expired because it was only valid upto 19-8-2018 - detained goods and subsequently levied tax and penalty under section 129(3), levy of tax and penalty was correct

?The Inspection Authority (IA) stated in his order that the appellant has transported goods?vide?Tax Invoices No's. (1) 912810025168, dated 18-8-2018 (2) 912810025169, dated 18-8-2018 connected with e-Way bills No's. (1) 191060235414, dated 18-8-2018 (2) 181060236795, dated 18-8-2018 worth of goods for Rs. 4,74,340/-. The IA further stated that the goods vehicle has been checked on 20-8-2018, thus noticed that the e-Waybills have been expired because they were only valid up to 19-8-2018.

Therefore, the IA treating that the goods have been transported without valid e-way bill, hence Levied Tax under CGST/APGST Act, 2017 as shown below:

The IA also recorded that the appellant has admitted the offence and paid tax & penalty as applicable on his own.

Thus, the assessing authority has passed orders under CGST & APGST Acts, dated 29-8-2018, by levying total amount of Rs. 1,70,760/-.

Aggrieved by the above orders passed by the assessing authority, the appellant has preferred the present appeal and disputed the levy of tax & penalty in total amount of Rs. 1,70,760/-.

Grounds of appeal

The grounds of appeal filed by appellant in the appeal are extracted hereunder:

(1)?The action of the Deputy Assistant Commissioner-III (ST), Gandhi Chowk Circle for collecting the tax of Rs. 85,380/- (SGST 42690 + CGST 42690) and penalty of Rs. 85,380/- (SGST 42690 + CGST 42690) for the goods under transport on the allegation of expiry of e-way bill without considering facts and circumstances of the case.

(2)?The appellant relies upon the Hon'ble AP High Court in the case of?Good Health Agro Tech Ltd.?v.?CTO?[1996] 22 APSTJ 78 AP High Court it was held that "Collection of advanced tax at the check point while the transport is covered by proper papers under the guise of protecting the State revenue amount to arbitrary exaction without any authority of law and violative of Art. 265 of the constitution" and also Hon'ble High Court Judgment in?Ambica Lamp House?v.?CTO?(Int.)-I, Enft., [2005] 40 APSTJ 56 APHC.

(3)?The provisions of Section 122 of the APGST Act has no application to the facts of case sub-item (xiv) of section 122 speaks transports any taxable goods without the cover of documents as may be specified in the behalf. In the instant case the appellant has produced all the required documents except advanced e-way bill and also the seller dealer has charged IGST in the invoices issued in favour of the appellant. The collection tax and penalty is without jurisdiction for the reason that the appellant is transported in the goods with valid documents.

(4)?The provisions of Section 68 and Rule 138 read with section 122 of the AP GST Act applies only when there is evasion of tax and not for expiry of e-Way bill.?Prayer : It is prayed to kindly declare the action of Deputy Assistant Commissioner-III (ST), Gandhi Chowk Circle, in collecting tax of Rs. 85,380/- and penalty of Rs. 85,380/- without establishing tax evasion is in violation of the provisions of section 129(3) of the SGST Act and thereby order for refund of the tax of Rs. 85,380/- and penalty of Rs. 85,380/- unlaw fully collected. It is also prayed to declare the action of the inspecting authority is contrary to GOMS No. 309, dated 24-7-2017.

Discussion

Perused the grounds of appeal filed by the appellant alongside the impugned order passed by the inspecting authority?i.e.?Deputy Assistant Commissioner of State Tax-III, Tenali, Gandhi Chowk Circle, Guntur Division.

The appellant contended that due to heavy rain on 19-8-2018, they could not transport the goods and also put forth that the distance between Uppa lapadu and Eluru is 96 Km as such the validity-e waybill is two days as prescribed in G.O.Ms. No. 309, dated 24-7-2017.

The appellant put forth the following case laws in support of their arguments.

(1)?The Hon'ble AP High Court in the case of?Good Health Agro Tech Ltd.?(supra)(2)?The Hon'ble High Court Judgment in?Ambica Lamp House, (supra)

The appellant further averred that the provisions of Section 122 of the APGST Act has no application to the facts of case sub-item (xiv) of Section 122 speaks transports any taxable goods without the cover of documents as may be specified in the behalf. In the instant case the appellant has produced all the required documents except advanced e-way bill and also the seller dealer has charged IGST in the invoices issued in favour of the appellant. The collection tax and penalty is without jurisdiction for the reason that the appellant is transported in the goods with valid documents.

Issues for adjudication

(1)?Whether the appellant contention that validity period for e-way bill is two days as per G.O.Ms. No. 309, dated 24-7-2017, is applicable to the present case or not?

(2)?Whether the appellant put forth any dependable and acceptable explanations against the levy of tax/penalty, by IA or not?

Analysis?:

Perused the grounds of appeal along with assessment order passed by the Inspecting Authority, and after thorough verification of records, the findings of the appellate authority are stated below.

Before embarking on adjudication of this issue, it is relevant here to examine and understand G.O.Ms. No. 309, dated 24-7-2017 and GST Rule 138(9)" of APGST Act, 2007, hence these are abstracted hereunder for better clarity.

NOTIFICATION

Whereas, Section 68 of the Andhra Pradesh Goods and Services Tax Act, 2017 (Act No. 16 of 2017) provides that the Government may require the person-in-charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed;

And, whereas, rule 138 of the Andhra Pradesh Goods and Services Tax Rules, 2017, stipulates that till such time as an 'e-way bill system' is developed and approved by the Council, the Government may, by notification, specify the documents that the person-in-charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage;

Now, therefore, in exercise of the powers vested under section 68 of the Andhra Pradesh Goods and Services Tax Act, 2017 (Andhra Pradesh Act No. 16 of 2017), read with Rule 138 of the Andhra Pradesh Goods and Services Tax Rules, 2017, the Government of Andhra Pradesh hereby notifies the document known as e-Way bill that is to be issued by the taxable person or any other person.

This notification will come into force with immediate effect and will he in operation till 30-9-2017.

(1)?Every registered person or unregistered person or a person liable to be registered under the AP Goods and Services Tax Act, 2017 shall generate e-Way bill in Form GST EWB-1.

(2)?e-Way bill is required for the movement of goods which are not exempted under the Act for all purposes?i.e.,?coming into the State or going out of the State or for the movement within the State, when the value of goods excluding tax exceeds Fifty Thousand Rupees.

(3)?However, the issue of an e-Way bill shall not be necessary where a person, who is not a taxpayer, transports his household goods or other articles for his own use from one place to another.

(4)?Generation of e-Way bill shall be the responsibility of the person as specified in the Table-1 below :

(5)?The person shall enter the details of such goods in the Way bill in Form GST EWB-1 with vehicle number in triplicate and issue the original and duplicate thereof duly signed by him or his manager or agent to the owner or the other person-in-charge of the goods vehicle. However, if the vehicle number is not known and the goods are handed over to the Transporter for Transport, the person can mention the same in the e-way bill form.

Further, when goods covered by a single invoice are carried in more than one goods vehicle, a separate 'e-way bill' has to be generated for each vehicle.

(6)?If the transporter carries goods of single e-way bill without mentioning the vehicle number by the persons mentioned in Table-1 or carries goods of more than one e-Way bill he shall generate 'Transporter Declaration' Form which is a consolidation of all the way bills carried by him before commencement of transport of goods as per the details of form GST EWB-1 in duplicate.

(7)?No Transporter Declaration Form is required if the Transporter carries goods of a single e-waybill on which vehicle number is mentioned.

(8)?In case of transhipment of goods to some other vehicle because of breakdown of vehicle Transhipment Declaration needs to be generated. Transhipment Declaration shall be generated by the Transporter himself. If the goods are transported by the person (as per Table 1) in this own vehicle the person himself has to generate Transhipment Declaration. As per Para (7) above exemption was given to the Transporter from generation of Transporter Declaration. In case of Transhipment in 3 such cases the Transporter has to generate Transporter Declaration first and then generate Transhipment Declaration.

(9)?The 'Form GST EWB-1' and 'Transporter Declaration' Form shall accompany the goods and shall be tendered by the person-in-charge of the goods vehicle to the officer who checks the vehicle, where the goods vehicle first checked in the State and after getting it verified and attested by the officer, the original should be retained by the officer and the duplicate shall be returned to the person submitting such Form GST e-way bill-1 or Transporter declaration form and he shall carry duplicate form along with goods vehicle.

(10)?The persons specified in Table-1 shall carry documents as per the provisions of AP Goods and Services Tax Act, 2017, in addition to the e-Way bill.

(11)?e-Way bills generated only through APCT web portal (www.ewaybill.apct.gov.in) under the authority of the Chief Commissioner shall be valid.

(12)?Form GST EWB-1 or Transporter Declaration Form can be cancelled only within 24 hours of generation with valid reasons.

(13)?In order to ensure that there are no instances of misuse of the facility of e-way bill system, the following validity period is fixed based on the distance. Period is to be calculated from the time of generation of the Form GST EWB-1 or Transporter Declaration Form or Transhipment Declaration Form whichever is the latest :

(1)?If the distance from the origin of the goods to the destination is less than 100 KMs, Validity period is two (2) days from the day and time of generation.

(2)?If the distance from the origin of the goods to the destination is between 101 KMs and 500 KMs, Validity period is three (3) days from the day and time of generation.

(3)?If the distance from the origin of the goods to the destination is between 501 KMs and 1000 KMs, Validity period is five (5) days from the day and time of generation.

(4)?If the distance from the origin of the goods to the destination is between 1001 KMs and 2000 KMs, Validity period is ten (10) days from the day and time of generation.

(5)?If the distance from the origin of the goods to the destination is 2001 KMs and above, Validity period is twelve (12) days from the day and time of generation.

(14)?This notification is not applicable for the dealers engaged in sale and purchase of

(1) Alcoholic liquor for human consumption

(2) Petroleum crude

(3) High speed diesel oil (HSD)

(4) Motor spirit (commonly known as petrol)

(5) Natural gas

(6) Aviation turbine fuel and registered under AP VAT Act, 2005 and they will continue to follow the procedures under the AP VAT Act, 2005 for generation of e-Way bill.

Rule 138(9) of APGST Act, 2017:

(9)?Where an e-way bill has been generated under this rule, but goods are either not transported or are not transported as per the details furnished in the e-way bill, the e-Way bill may be cancelled electronically on the common portal within twenty four hours of generation of the e-Way bill:?

Provided?that an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of Rule 138B :?

Provided further?that the unique number generated under sub-rule (1) shall be valid for a period of fifteen days for updation of Part B of FORM GST EWB-01.

(l0)?An e-way bill or a consolidated e-way bill generated under this rule shall be valid for the period as mentioned in column (3) of the Table below from the relevant date, for the distance, within the country, the goods have to he transported, as mentioned in column (2) of the said [Table].

It is further pertinent here to record that as per APGST Rule 138(9), whenever any dealer could not transport the goods within the validity time of e-Way bill, such e-way bill needs to be cancelled electronically in the common portal within 24 hours of generation. But, in the present case though the dealer contended that there was heavy rain on 19-8-2018, that's why, they could not transport the goods, however failed to cancel the e-way bill within 24 hours of generation. Rule 138(10) clearly prescribes that validity of e-way bill for a distance up to 100 km is one day only. The case law put forth by the appellant have also been perused and found to have no relevance to the present dispute on hand.

19.?Regarding penalty also, the appellant could not put forth any dependable explanations and the Inspecting Authority's action on this aspect are found to be legitimate.

Conclusion?:

20.?In view of the above stated findings & circumstances and considering the clearly envisaged Rule provision on this aspect, the appellant contentions cannot be accepted and found to be rejectable. Therefore, the levy of tax and penalty, need not be interfered with and to be upheld as legitimate, and the appeal is dismissed by confirming the tax and penalty so levied by the inspecting authority.

Result of the appeal

21.?In the result, the levy of tax & penalty by the inspecting authority, are confirmed, and the appeal stands dismissed.

For latest Income Tax and GST updates click on the link below to join WhatsApp group:

For latest GST Case laws click on the link below to join WhatsApp group:

Vivek Agarwal FCA, CS, LLB

Head office:?Basheerbagh?Branch office:?Jubilee Hills, Road no. 36

Web:?www.haacas.com?Email:[email protected]

Contact:?079810 33829