Detention of goods due to non generation of E-invoice

[Guest]

In our case, goods are transported against the tax invoice and e-way bill. However, such an invoice is not raised in accordance with Rule 48(4) on the date of interception. But immediately a day after the issuance of the detention & Seizure order, an e-invoice was raised properly. so, in this case, what will be the grounds one could take for the release of goods without payment of penalty under section 129?

Thanks in Advance.

[Alkesh Jani]

Shri

As per the facts stated, my view is

As per rule 48(5), it can be said that goods were transported without invoice and detention is legally sustainable.

But as you have issued Invoice as per Section 31 of CGST Act, 2017, there is no intention to evade the payment of tax.

Moreover, corrosive action may be initiated for evasion of tax, and not for procedural lapse. Further, Section 31 and Rule 48 are mechanical (procedural) in nature and not charging section, where such strict interpretation is warranted.

There are judgments/decisions available, where penalty is not to be imposed is being underlined by the courts.

Help of our experts of this forum may also be taken.

Thanks

[Ganeshan Kalyani]

Your intention is not to evade tax. Officer intercepting the vehicle should see for e-way bill and invoice.

[Guest]

Dear Sir/Madam,

@Alkesh Jani requesting you to help me out in finding the case law for aforesaid ground.

[Alkesh Jani]

Shri Kumar ji,

The grounds to be contested are to be set as per the facts and circumstances of the case and it may differ from case to case.

However, as requested by you, please refer WP (MD) No. 5720 of 2022 Judgement /order passed by Hon'ble Madras High Court in case of Smart Roofing Pvt. Ltd Vs. State Tax Officer. - 2022 (4) TMI 241 - MADRAS HIGH COURT

I have also mentioned that help of our expert may be taken, i reiterate the same.

Thanks

AI Summary

E invoice non generation may not indicate tax evasion; goods detention can be contested for release without penalty. Detention for non generation of an e invoice arises where Rule 48(4) requirements were not met at interception, but if a compliant invoice is issued immediately thereafter the key contestable issue is absence of intent to evade tax. The argument for release without penalty rests on treating the failure as a procedural lapse, the mechanical nature of invoicing provisions, prompt rectification by issuing the invoice, and reliance on judicial decisions declining penalties in similar circumstances.