2020 (11) TMI 831 - HC - GST

High Court affirms CGST Act detention under Section 129(3), emphasizing e-way bill validity.

The High Court upheld the detention and notice under Section 129(3) of the CGST Act, interpreting Rule 138(10) to require timely extension of e-way bill ... Release of detained goods alongwith vehicle - expired E-way bill - HELD THAT:- It is clear from Rule 138(10) that the specific period for which an e-way bill is valid is evident from the table under that rule. Serial Nos.1 and 2 deals with cargo other than Over Dimensional Cargo [hereinafter 'ODC'] and serial Nos.3 and 4 with ODC. ODC is cargo having dimensions in excess of the vehicle in which it is carried. The contention of the appellant is that the amendment by which an insertion was made in 2019 takes in multimodal shipment in which at least one leg involves transport by ship and whether it be an ODC or goods other than ODC. Enabling proviso under Rule 138(10) - HELD THAT:- We perfectly agree with the submission of the learned Senior Government Pleader that this would only enable the consignee to update the e-way bill extending the period provided under the Table; within eight hours from the time of its expiry - If the shipment could be cleared only just before or after the period of expiry of the e-way bill, then there could be an extension made by an updation and the transport commenced with such e-way bill accompanying the goods. The contentions of the appellant is rejected - appeal dismissed. Issues:1. Validity of detention and notice under Section 129(3) of the CGST Act.2. Interpretation of Rule 138(10) of the CGST Rules regarding e-way bill validity extension.3. Applicability of provisions for multimodal shipment.4. Authority to update e-way bill within eight hours of expiry.5. Rejection of contentions and affirmation of the Single Judge's judgment.Issue 1:The appellant challenged the detention and notice under Section 129(3) of the CGST Act, which was upheld by the Single Judge. The detention occurred due to the expiry of the e-way bill accompanying a consignment of ceramic tiles. The appellant argued that Rule 138(10) allows for an extension of the e-way bill's validity within eight hours of expiry. The Single Judge directed the release of goods upon furnishing a Bank Guarantee for the demanded amount.Issue 2:The appellant contended that the e-way bill's validity could be extended within eight hours of expiry as per Rule 138(10). The appellant claimed entitlement to an additional day for every 20 Kms of transport due to multimodal shipment involving road and sea transport. However, the Single Judge found that the appellant did not attempt to extend the validity period within the specified time frame. The Court held that the more beneficial provision cannot be applied solely based on the transport being multimodal.Issue 3:The Court examined the provisions of Rule 138(10) concerning the validity period of e-way bills for different types of cargo, including Over Dimensional Cargo (ODC). The appellant argued that the amendment in 2019 included multimodal shipments involving transport by ship under Serial Nos. 3 and 4 of the Table. However, the Court found that the appellant did not take advantage of the extended period when updating the e-way bill.Issue 4:Regarding the enabling proviso under Rule 138(10, the Court agreed with the Senior Government Pleader that the consignee must update the e-way bill within eight hours of expiry to extend the validity period. The Court emphasized that the appellant had no authority to commence transport without such an extension being carried out within the specified time frame.Issue 5:The Court rejected both contentions of the appellant and affirmed the Single Judge's judgment. The directions given by the Single Judge were to be implemented by the Department, and the appeal was dismissed summarily.In conclusion, the High Court upheld the detention and notice under Section 129(3) of the CGST Act, interpreting Rule 138(10) to require timely extension of e-way bill validity. The Court rejected arguments related to multimodal shipment provisions and affirmed the Single Judge's decision, dismissing the appeal.