2025 (7) TMI 1877 - HC - GST

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 ... Levy of IGST and penalty - detention of goods - non-availability of Part B of the Eway bill when the consignment was accompanied with tax invoice bearing Letter of Undertaking number, consignment note, letter of credit for the export goods - HELD THAT:- As per Rule 138(1), every registered person who causes the movement of goods of consignment value exceeding Rs. 50,000/- shall, before commencement of such movement, furnish information relating to the said goods as specified in Part A of FORM GST EWB-01 electronically on the common portal. The transporter on an authorisation, registered person furnishes such information. As per sub-Rule (2) of Rule 138, where the goods are transported by a registered person as a consignor whether in his own conveyance or a hired one or a public conveyance by road, the said person shall generate the e-way bill in FORM GST WEB-01 electronically on the common portal after furnishing information in Part B of FORM GST EWB- 01. In the E-Way bill Part A Slip, it is specifically mentioned that ‘Not Valid for Movement as Part B is not entered (2001 km)'. Therefore, it is clear from the aforesaid slip that in absence of generation of Part B, this Part A of the E-way Bill is also not valid. For movement of 2001 kms of a consignment valued at Rs. 19,18,887.1 it was mandatory for the petitioner to generate Part B of the E-Way bill. Therefore, in order to confirm that the consignment is being exported and reached its destination, the generation of Part B of the Eway bill is not a mere formality but a mandatory condition. Hence, the appellate authority has rightly observed that as per the provisions of Section 68 of the GST Act, 2017 and Rule 138 of the MPGST Rules, 2017 the E-way bill is a statutory document for transportation of the goods and without generation of Part B, the E-way bill is not valid. Therefore, there is an admitted violation on the part of the petitioner. The impugned order dated 30.03.2022 passed by the respondent authority is just and proper and does not warrant any interference by this Court - Petition 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.