E-way bill expiry due to vehicle breakdown and portal issues not tax evasion when no revenue loss

The HC ruled that expired E-way bills due to vehicle breakdown and portal access issues do not constitute tax evasion when no revenue loss occurs. Following GST Circular No.10/2019, the court found the case similar to Example 2 where E-way bill expiry creates no evasion scope. The court ordered release of detained goods and vehicle upon payment of Rs.5,000 penalty, rejecting higher penalties since breakdown and portal blockage were genuine reasons for non-renewal despite four hours remaining for extension.

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Issues Involved:
1. Expiry of e-way bill leading to detention of goods.
2. Blocked portal preventing extension of the e-way bill.
3. Authority of the transporter to challenge the proceedings instead of the consignment owner.
4. Imposition of penalty for expired e-way bill.

Detailed Analysis:

Issue 1: Expiry of e-way bill leading to detention of goods
The writ petition was filed challenging the proceedings dated 02.12.2022 under Section 129(3) of the Central Goods and Services Tax Act, 2017 (C-G&ST Act) read with the State/Union Territory Goods and Services Tax Act, 2017 and Section 20 of the Integrated Goods and Services Tax Act, 2017. The truck carrying a consignment of 'Angles' was intercepted at Walaja toll at about 04.00 am, and the only ground for detention was the expiration of the e-way bill.

Issue 2: Blocked portal preventing extension of the e-way bill
The learned counsel for the petitioner argued that according to Rule 138(10) of the Goods and Services Tax Rules, 2017, the validity of the e-way bill can be extended within 8 hours from the time of expiry. The e-way bill expired at 23:59 hours on 01.12.2022, and at the time of interception, four hours were left to extend it. However, the portal was blocked, preventing the extension.

Issue 3: Authority of the transporter to challenge the proceedings instead of the consignment owner
The learned Revenue counsel referred to an order dated 25.08.2022, suggesting that the owner of the consignment should approach the court, not the transporter. However, this court distinguished the facts of the present case from the previous order, noting that the earlier case involved goods transported without documents or with discrepancies, which was not the situation here.

Issue 4: Imposition of penalty for expired e-way bill
The respondent passed an order for a penalty of Rs.6,76,764/-. However, the court noted that the order was made while the writ petition was actively heard. The court referred to a circular dated 31.05.2019, which states that if the movement of goods is accompanied by at least one of the basic documents, a penalty of up to Rs.5000/- per act shall be levied. The court found that the case at hand was similar to Example 2 in the circular, where the expiry of the e-way bill does not create any scope for evasion.

Judgment:
- The court set aside the impugned order dated 08.12.2022 and the proceedings dated 02.12.2022.
- The petitioner was directed to pay a penalty of Rs.5,000/- as per the circular dated 31.05.2019 by the next day.
- Upon payment of the penalty, the respondent was directed to release the truck and consignment forthwith.
- The order was made clear to be specific to the peculiar facts of this case and should not serve as a precedent for other cases.

Conclusion:
The court concluded that there was no revenue loss due to the expired e-way bill and that a minimal penalty of Rs.5,000/- was appropriate. The truck and consignment were to be released upon payment of this penalty, emphasizing that each case should be judged on its individual facts and circumstances.

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