Adjudicating authority upholds penalty for invalid E-way bill despite technical arguments.

The adjudicating authority upheld the impugned order, rejecting the appeal and confirming the penalty and tax demand. The appellant's failure to carry a valid E-way bill led to the imposition of the penalty, despite arguments regarding technical defects and violations of natural justice being dismissed.

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Issues Involved:
1. Validity of the E-way bill.
2. Imposition of penalty.
3. Principles of natural justice.
4. Technical and venial defects.
5. Applicability of Circular No. 64/38/2018-GST.

Detailed Analysis:

1. Validity of the E-way Bill:
The core issue revolves around the validity of the E-way bill. The conveyance bearing No. RJ14-GE-4146 was intercepted, and it was found that a valid E-way bill was not available at the time of interception. Specifically, the vehicle number was not updated in the E-way bill. According to Rule 138 of the CGST Rules, 2017, every registered person must furnish information relating to the movement of goods exceeding a consignment value of fifty thousand rupees. The appellant failed to update the vehicle number in Part-B of the E-way Bill, which is a mandatory requirement for the validity of the E-way bill during the movement of goods.

2. Imposition of Penalty:
The adjudicating authority imposed a penalty equal to one hundred percent of the tax amounting to Rs. 1,12,488/-. The appellant argued that the discrepancy was technical and did not result in any revenue loss. However, the authority found that the appellant did not carry a valid E-way bill at the time of interception, thus justifying the imposition of the penalty. The discretion to impose a penalty must be exercised judicially, as reiterated in the case of Hindustan Steel Limited v. State of Orissa, where penalties are not to be imposed for technical or venial breaches unless there is a deliberate defiance of law.

3. Principles of Natural Justice:
The appellant contended that the impugned order was passed without proper enquiry and without giving adequate opportunity to present their case, thus violating the principles of natural justice. The adjudicating authority, however, issued a notice and served it on the person-in-charge and the owner of the goods, followed by the issuance of the impugned order. The appellant's claim that the order was passed arbitrarily and without proper hearing was not accepted by the authority, which found that the procedural requirements were met.

4. Technical and Venial Defects:
The appellant argued that the discrepancies were technical and venial in nature, without any deliberate intention to evade tax. The adjudicating authority, however, emphasized that the E-way bill was not valid for the movement of goods as the vehicle number was not updated, which is a critical requirement under Rule 138(5) of the CGST Rules, 2017. The authority rejected the appellant's contention, stating that the E-way bill must be correctly furnished in both Part-A and Part-B for the movement of goods.

5. Applicability of Circular No. 64/38/2018-GST:
The appellant cited Circular No. 64/38/2018-GST, which suggests that for technical errors without deliberate intention to evade tax, the penalty should not exceed Rs. 1,000/-. However, the adjudicating authority did not find this circular applicable in the present case, as the discrepancy was not merely technical but involved a failure to comply with the mandatory requirement of updating the vehicle number in the E-way bill.

Conclusion:
After a thorough examination of the case records and submissions, the adjudicating authority upheld the impugned order, rejecting the appeal. The authority concluded that the appellant failed to carry a valid E-way bill, justifying the imposition of penalty and dismissing the arguments related to technical defects and natural justice violations. The appeal was rejected, and the penalty and tax demand were confirmed.

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