wrong declaration in e-way bill

[AJIT Tiwary]

Dear Expert,

One of my client has purchased a heavy machinery and send it to the location of the contractor from the place where he purchased the equipment and accordingly e-way has been generated from bihar to manipur but the seller of equipment has supplied only at Guwahati, further my client has arrange the transporter and further generate the e-way bill from Guwahati to manipur but in e-way bill he shows it as outward supplies and show the amount of machinery with gst tax.

now, ASMT-10 has been issued in which it shows that outward supplies has different as compare to e-way bill vs GSTR-3B (Shows the rental income in GSTR-3B) and tax has been charged on differential amount. further no reply has been given by the client to department and show cause notice has been issued by the department but again no reply has been given by the client to department. now, department has issued DRC-07

pls clarify

[Padmanathan KV]

Once DRC-07 is issued, the only option is to file an appeal in APL-01 by paying 10% of the demanded tax as pre-deposit within 3 months.

The issue involved appears to be only factual and no major legal issue seems to be involved here. Produce before the appellate authority, a copy of Invoice of Heavy vehicle, E-way bills, communications with contractor and vendor as well as confirmation letters from parties involved to support of your facts. Only by going through the ASMT-10, DRC-01A/DRC-01, DRC-07 etc opinion can be provided.

Advisable to consult an expert for filing the appeal.

[KASTURI SETHI]

If transaction is genuine, it is a procedural and technical lapse. I think there is no revenue loss in this transaction. The case is worth fighting. I support the views of Sh. Padmanathan Kollengode Ji.

[Shilpi Jain]

Was hearing notice given to your client? Were the principles of natural justice followed by department before giving the order?

Is it not a notice/order with mere assumption without any evidence regarding taxability? It looks like the department has not identified the exact nature of the supply that it is looking to tax and merely on the basis of the difference has imposed tax liability.

This is a good case to file a Writ in the High COurt to get relief without the need to make the 10% pre-deposit. Consider this in case the stakes are high.

T

[Amit Agrawal]

Many factual aspects are not clear from the query raised, at least to me. Why original supplier transported said machinery only to Guwahati? What happens to said machinery at Guwahati? Is your client is registered at Guwahati and if yes, who has taken ITC against original supply (Guwahati / Manipur) of machinery? Who (i.e. Manipur / Guwahati) has raised invoices showing 'renting' of said machinery? & So on .......

AI Summary

Wrong e-way bill declaration may trigger tax assessment and require an appeal with a pre-deposit and documentary support. Wrong declaration in an e way bill showing outward supply and tax can lead to assessment notices (ASMT 10) and a demand notice (DRC 07); the statutory remedy to contest such demand is filing APL 01 with a required pre deposit, while taxpayers should gather invoice, e way bills, transporter records and communications to substantiate factual positions. If procedural fairness was lacking, a writ petition may be considered to seek relief without pre deposit.