E-way bill expiry and bona fide repair movement did not justify tax or penalty absent any tax evasion intent.

Goods moved under an e-way bill for repair of damaged goods, with no indication of tax evasion, did not justify levy of tax and penalty merely because detention occurred shortly after expiry of the e-way bill validity period. Rule 138(10) of the West Bengal GST Rules permits extension of validity, but the short lapse beyond the extension window was treated as a minor procedural issue on these facts. The Calcutta HC therefore granted relief and set aside the orders levying tax and penalty.

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Issues: Whether tax and penalty could be sustained where the goods were covered by an e-way bill, the goods were being returned to the factory for repairs, and the detention occurred shortly after expiry of the e-way bill validity period.

Analysis: The e-way bill was generated for transport of the assessee's goods to its factory for repairs, and the materials on record showed that no tax was otherwise payable on such movement. Rule 138(10) of the West Bengal Goods and Services Tax Rules, 2017 permitted extension of the e-way bill validity period, but the goods were intercepted after the relevant extension window had expired by a very short margin. The factual matrix further showed that the movement was for repair of damaged goods and there was no allegation of tax evasion. In similar matters, relief had been granted where the conduct of the assessee did not indicate any intention to evade tax.

Conclusion: Tax and penalty were not justified on the facts and the challenge to the impugned orders succeeded.

Final Conclusion: The assessee was held entitled to relief and the orders levying tax and penalty were set aside.

Ratio Decidendi: Where goods are moved under an e-way bill for a bona fide purpose and the surrounding facts do not indicate an intention to evade tax, minor expiry-related detention by itself does not justify levy of tax and penalty.

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