2018 (7) TMI 1097 - HC - GST

Petitioner's technical error claim rejected for non-filing Part-B e-way bill on inter-state supply exceeding prescribed distance limits

MP HC dismissed petition challenging GST demand and penalty for non-filing of Part-B of e-way bill. Petitioner claimed technical error prevented updating ... Inspection of goods in movement - e-way bill Part-B update requirement - detention and assessment under Section 129 - penalty for transporting without prescribed documents - grievance mechanism on GST portal as remedy for technical errorsE-way bill Part-B update requirement - penalty for transporting without prescribed documents - grievance mechanism on GST portal as remedy for technical errors - Whether penalty and detention/assessment imposed for failure to update Part B of the e way bill could be sustained. - HELD THAT: - The Court found that the petitioner, a national transporter, failed to update Part B of the e way bill before movement of goods for a long inter state journey; Part B contains conveyance details and its updation is a mandatory pre condition under the rules. The adjudicating authority rejected the petitioner's plea of a technical error because the GST common portal provides a grievance option which was not availed, and because the petitioner's organisational capacity made the explanation implausible. Given that non updation rendered the e way bill incomplete and therefore not legally valid for the movement, the authorities were entitled to detain the vehicle, assess the goods under the statutory provision relating to detention, and impose penalty for transporting taxable goods without the prescribed documents. The Court distinguished earlier authority relied upon by the petitioner on facts, noting that in that case the journey was short and the obligation to fill Part B did not operate in the same manner. The petitioner's request for imposition of a lesser/'minor' penalty was declined on the basis that the tax liability exceeded the threshold for such treatment. The writ did not disclose any error of law or jurisdiction in upholding the detention, assessment and penalty.Orders of detention, assessment and imposition of penalty for failure to update Part B of the e way bill are sustainable; writ petition dismissed.Final Conclusion: The High Court upheld the orders of the GST Appellate Authority and the Assistant Commissioner sustaining detention, assessment and penalty for non updation of Part B of the e way bill, and dismissed the writ petition. Issues:Violation of Section 68 r/w Rule 138 of the Central Goods and Service Tax Act, 2017 and M. P. Goods and Service Tax Act, 2017 leading to penalty imposition.Detailed Analysis:Issue 1: Violation of Section 68 and Rule 138The petitioner, a Private Limited company engaged in transportation services, was found to have violated Section 68 of the Act which mandates inspection of goods in movement. The petitioner's vehicle was checked, revealing non-compliance with Rule 138(5) of the M. P. Goods and Service Tax Rules, 2017, regarding updating Part-B of the e-way bill on the common portal. This violation led to penalty imposition under Section 122 of the Act as the petitioner was transporting taxable goods without proper documentation.Issue 2: Legal Provisions and AmendmentsThe State Government framed the M. P. Goods and Service Tax Rules, 2017, amended in 2017, making it mandatory for registered persons causing goods movement exceeding Rs. 50,000 to upload e-way bill information with Part-A and Part-B. The failure to update Part-B of the e-way bill, as in the petitioner's case, constitutes a breach of Rule 138 and Section 68, justifying penalty imposition.Issue 3: Adjudication and Penalty ImpositionFollowing due procedure, the Department initiated penalty proceedings under Section 129 of the Act due to the petitioner's non-compliance with statutory provisions. Despite the petitioner's explanation of a technical error hindering Part-B update, the penalty was upheld by the adjudicating Authority and the appellate body, emphasizing the mandatory nature of Part-B updating and dismissing claims of minor penalty applicability.Issue 4: Grievance and Technical ErrorThe petitioner's assertion of a technical error for non-updating Part-B was rejected by the authority, citing the absence of raised grievances on the GST portal. The petitioner's status as a National Level Courier company employing experts in e-way bill uploading further negated claims of minor penalty applicability, given the substantial tax liability involved.Issue 5: Judicial Precedent and DismissalThe petitioner's reliance on a Division Bench decision of the Allahabad High Court in a similar case was dismissed, as the present case involved mandatory Part-B updating due to the substantial distance of goods transportation. The court upheld the penalty imposition, emphasizing the petitioner's violation of statutory provisions, leading to the dismissal of the writ petition.In conclusion, the judgment upholds the penalty imposition on the petitioner for violating Section 68 r/w Rule 138 of the Acts, emphasizing the mandatory nature of e-way bill updating and dismissing claims of minor penalty applicability based on legal provisions and precedents.