2023 (6) TMI 1231 - HC - GST

Supreme Court Reduces Excessive E-Way Bill Penalty from 200% to Rs.50,000, Balancing Technical Violation with Fair Penalty

M/s BITUMIX INDIA LLP AND ANR. Versus DEPUTY COMMISSIONER OF REVENUE, STATE TAX AND ORS.

The SC modified a 200% penalty imposed for an expired e-Way Bill. Upon finding the penalty excessive, the court reduced it to Rs.50,000 covering both CGST ... Levy of 200% penalty - only mistake committed by the appellants is on not renewing the e-Way Bill which expired on 18.03.2022 - HELD THAT:- The appellants should have done since the goods were sold in transit. Therefore, there is a violation had committed by the appellants but the violation is not as grave enough to call for imposition of penalty at the rate of 200%. Since on the date when the vehicle was intercepted the goods were covered by a valid e- Way Bill which satisfies the requirement under Section 129 of the Act. However, that the mistake committed by the appellants in not renewing the earlier e-Way Bill which expired on 18.03.2022 the appellants should be put on terms. The appeal as well as the writ petition are allowed and the order of penalty passed by the adjudicating authority as affirmed by the appellate authority are set aside and modified with the direction to the appellants to pay a penalty of Rs.50,000/- which will include both CGST and WBGST instead of 200% penalty as imposed by the authorities. Issues involved: Interpretation of penalty under Section 129 of the CGST Act and WBGST Act for failure to renew e-Way Bill leading to detention of goods.Summary:Issue 1: Allegation and Penalty ImpositionThe appellants' goods, en route to Assam, were detained due to the expiration of the e-Way Bill on 18.03.2022. The goods were later transported with a new e-Way Bill. A 200% penalty was imposed under Section 129 of the CGST Act and WBGST Act for not renewing the expired e-Way Bill.Issue 2: Validity of e-Way BillAt the time of interception on 25.03.2022, the appellants possessed a valid e-Way Bill, meeting the requirements of Section 129 of the Act. The main error was the failure to renew the expired e-Way Bill.Issue 3: Penalty ModificationThe Court acknowledged the violation but deemed the 200% penalty excessive. The appellants were directed to pay a reduced penalty of Rs.50,000, covering both CGST and WBGST. The amount was to be recovered from the bank guarantee furnished by the appellants, with the remaining balance discharged by the authorities upon payment.Separate Judgment:A corrigendum order was issued in M.A.T. 1011 of 2023, dated 23-6-2023, involving M/S BITUMIX INDIA LLP & ANR. vs. THE DEPUTY COMMISSIONER OF REVENUE, STATE TAX, BUREAU OF INVESTIGATION & ORS.