Expired e-way bill detention: tax demand sustained, but penalty reduced on facts and goods released after payment.

Transportation of goods after expiry of a valid e-way bill attracted GST consequences, but the tax demand was sustained while the penalty was moderated on the facts. The Court noted that a valid e-way bill had been generated, the goods were capital goods used in business, and there was no material showing an unrelated purpose for the movement. It confined relief to the penalty component, reduced the penalty to 50%, and ordered consequential release of the goods and vehicle on payment of the modified amount. The relief was granted under Article 142 and was stated not to operate as a precedent.

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Issues: Quantum of penalty payable for interception and detention of goods transported without a valid E-way bill, and whether the penalty imposed should be reduced while sustaining the tax demand.

Analysis: The movement concerned capital goods owned by the assessee and used in its business operations. A valid E-way bill had been generated, but the consignment was moved after its expiry, attracting the statutory consequences under the GST enactments. The Court confined itself to the quantum of penalty and noted that the tax liability itself was not displaced. In view of the admitted factual background, the existence of a generated E-way bill, and the absence of material showing that the goods were meant for any unrelated purpose, the Court found it to interfere only on the penalty component. Exercising its discretion, the Court also made it clear that the relief was granted under Article 142 of the Constitution of India and would not operate as a precedent.

Conclusion: The tax demand was upheld, but the penalty was reduced to 50% of the amount imposed, resulting in partial relief to the assessee.

Final Conclusion: The appeal was disposed of by sustaining the tax component while granting limited relief on penalty, with consequential release of the goods and vehicle upon payment of the modified amount.

Ratio Decidendi: Where transportation of goods is effected after expiry of a valid E-way bill, the tax demand may be sustained, but the penalty component can be moderated on the facts in the exercise of equitable discretion.

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