Court rules against immediate tax payment due to e-way bill misdeclaration

The court ruled that the demand for immediate tax payment with penalties due to misdeclaration in the e-way bill was impermissible. The petitioner, engaged in the construction materials business, faced detention of goods for allegedly extending the e-way bill's validity by misdeclaring vehicle type. The court allowed the competent authority to conduct further inquiry while ordering the petitioner to deposit 50% of the disputed amount with the tax department, subject to final adjudication. Upon compliance with specified conditions, including securing the remaining amount through a bond, the goods and vehicle were to be released immediately.

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Issues: Misdeclaration in e-way bill leading to detention of goods, demand for payment of taxes with penalties, release of goods and vehicle, conditions for release.

The judgment dealt with a case where the petitioner, engaged in the business of providing construction materials, faced detention of goods due to misdeclaration in the e-way bill. The petitioner had sold Bitumen-vg-30 and paid GST, but the goods were detained at a check-post for allegedly misdeclaring the vehicle type in the e-way bill to extend its validity. The tax authority demanded payment of Central and State GSTs with penalties. The petitioner contended that the misdeclaration was an error without any intention to exploit the e-way bill's validity period. The court acknowledged the need for further inquiry but deemed the demand for immediate tax payment as impermissible. The judgment emphasized allowing the competent authority to proceed with the inquiry while releasing the goods and vehicle under specified conditions.

Regarding the release of goods and vehicle, the court ordered the petitioner to deposit 50% of the disputed amount, rounded off to a specific sum, with the tax department as per Section 49 of the State GST Act. This deposit was made subject to the final outcome of the adjudication proceedings. The remaining 50% of the disputed amount was to be secured by the petitioner through a bond to pay if found liable. Once the petitioner fulfilled these conditions, the goods and vehicle were to be released immediately. The competent authority was tasked with making a final determination on the petitioner's tax/penalty liability, with any deposited amount to be returned if no liability was established. The petition was disposed of accordingly, with any pending applications also being resolved.

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