IGST and penalty upheld for missing Part B of E-way bill under Rule 138 for high-value, long-distance goods

The HC upheld the levy of IGST and penalty for detention of goods due to non-generation of Part B of the E-way bill, despite the consignment being accompanied by a tax invoice with an LOU number, consignment note, and letter of credit. The court held that under Rule 138 of the MPGST Rules, generating Part B of the E-way bill is mandatory for consignments exceeding Rs. 50,000 in value and distance over 2000 km. The absence of Part B rendered the E-way bill invalid, constituting a statutory violation. The appellate authority's order imposing tax and penalty was affirmed, and the petition challenging the same was dismissed.

---

---

ISSUES:

Whether the non-generation of Part B of the E-Way bill invalidates the transportation of goods and justifies detention and imposition of IGST and penalty under Section 129 of the GST Act.Whether the petitioner was entitled to export the consignment without payment of IGST despite non-compliance with E-Way bill requirements.Whether the order imposing tax and penalty was passed in violation of the principles of natural justice due to lack of opportunity of hearing.

RULINGS / HOLDINGS:

Non-generation of Part B of the E-Way bill renders the E-Way bill invalid and constitutes a contravention of the statutory requirements under Rule 138 of the MP GST Rules, 2017, justifying detention and seizure of goods under Section 129 of the GST Act.The petitioner was not exempt from generating Part B of the E-Way bill for export consignments exceeding Rs. 50,000 in value; hence, the consignment could not be transported without compliance, and the imposition of IGST and penalty was lawful.The order imposing tax and penalty complied with the provisions of Section 129(4) of the GST Act, which mandates an opportunity of hearing before determination of tax, interest or penalty; no violation of natural justice was established.

RATIONALE:

The Court applied Section 129 of the Madhya Pradesh Goods and Service Tax Act, 2017, which authorizes detention or seizure of goods transported in contravention of the Act or Rules, and Rule 138 of the MP GST Rules, 2017, which mandates generation of E-Way bills in two parts-Part A and Part B-for movement of goods exceeding Rs. 50,000 in value.The Court emphasized that Part B of the E-Way bill, containing vehicle details, is a mandatory condition for valid transportation and not a mere formality, as evidenced by the E-Way bill slip stating 'Not Valid for Movement as Part B is not entered.'The Court rejected reliance on precedents where E-Way bill lapses were minor or non-existent, distinguishing the present case due to the admitted non-generation of Part B.No dissent or doctrinal shift was noted; the judgment reaffirmed existing statutory interpretation requiring strict compliance with E-Way bill provisions for interstate or export movement of goods.

---