2022 (12) TMI 298 - HC - GST

HC quashes detention of goods and vehicle where e-Way bill expired 41 hours before interception without fraudulent intent

Shree Govind Alloys Pvt. Ltd. Versus State Of Gujarat

The Gujarat HC quashed detention of goods and vehicle where e-Way bill had expired 41 hours before interception. The court held that expiry of e-Way bill ... Detention of goods alongwith the vehicle - E-Way bill had expired 41 hours before the time of interception - HELD THAT:- It is not in dispute that in the instant case, e-Way Bill had expired 41 hours before and the release of goods of conveyance and transit through the authority concerned - the detention is also on the ground that the goods are of expiration of the e-Way bill number, which had expired during the transit and the same cannot be the ground for detaining and seizure of M.S. Billet along with the vehicle truck. This Court in Govind Tobacco Manufacturing Co. vs. State of U.P. [2022 (5) TMI 1022 - ALLAHABAD HIGH COURT] has held that as there is expiry of e-Way bill on transit, the seizure of said vehicle and the goods is not permissible under the law. In the case before the High Court of Madhya Pradesh at Jabalpur in M/s. Daya Shaker Singh vs State of Madhya Pradesh passed in Writ Petition No.12324 of 2022 on 10.08.2022, where also the Court had intervened considering the fact that the respondent could not establish any element of evasion of tax with fraudulent intent or negligence on the part of the petitioner. Delay was of almost 4 ½ hours before the e-Way bill could expire. It appeared to be bona fide and without establishing any fraudulent intention. Here also what is found is that there is no fraudulent intention for this to happen. The impugned order dated 04.11.2022 demanding the sum of Rs.7,53,364/-is quashed and set aside - Petition allowed. Issues:Challenge to authority demanding tax and penalty under section 129(3) of the Central Goods & Services Tax Act, 2017.Analysis:The petitioner, a Private Limited Company, challenged the authority's demand of Rs. 7,53,364/- as tax and penalty under section 129(3) of the CGST Act, 2017. The petitioner's grievance was that due to the truck being in a non-motorable condition, goods could not be delivered on time, leading to the seizure of the truck and goods. The petitioner sought various reliefs, including quashing the impugned order, release of goods and the vehicle, and interim relief pending disposal of the petition.Upon hearing both sides and examining the relevant legal provisions, the Court considered section 129 of the Act, which deals with detention, seizure, and release of goods and conveyances in transit. The Court noted that the detention was based on the expiry of the e-Way bill, which had expired 41 hours before interception. However, the Court found that the expiration of the e-Way bill during transit could not be a valid ground for detention and seizure of goods and conveyance.Referring to previous judgments, the Court highlighted a case where the seizure of goods due to the expiry of the e-Way bill was deemed impermissible under the law. The Court emphasized that in the absence of fraudulent intent or negligence, such detention was not justified. In the present case, the Court found no fraudulent intention behind the expiration of the e-Way bill, leading to the allowance of the petition.As a result, the Court allowed the petition, quashing the impugned order demanding tax and penalty, as well as the order of detention and notice issued under section 129(3) of the Act. The judgment emphasized the importance of establishing fraudulent intent or negligence before seizing goods based on the expiration of the e-Way bill during transit.