M./S M S Metals And Steels LTD vs. Commercial Tax Officer (Enforcement) -34

Held

The Court allowed the petition, setting aside the impugned orders passed by the Commercial Tax Officer (Annexure-B) and the Joint Commissioner of Commercial Taxes (Appeals-2) (Annexure-A). The Court noted that while the petitioner contended they had produced documents showing the vehicle passing the toll plaza at Nelamangala at 3:54 p.m. on 09.11.2018, these documents were not adverted to, considered, or appreciated by the respondent authorities before passing the impugned orders. Without expressing any opinion on the merits of the rival contentions, the Court deemed it just and proper to set aside the orders and remit the matter back to the Commercial Tax Officer (Respondent No.1). This was to provide the petitioner one more opportunity to produce the documents at Annexures-L & M before the Prescribed Authority to establish their claim that the vehicle and goods had reached the destination point on 09.11.2018 prior to the expiry of the e-way bill. The Prescribed Authority was directed to re-consider the matter afresh in accordance with law after giving the petitioner an opportunity to file additional documents and objections.

Facts

The petitioner, M/s. M.S. Metals & Steels Ltd., sold TMT Bars worth Rs. 15,09,000/- to M/s Bharatiya City Developers Pvt. Ltd. on 05.11.2018. An e-way bill was generated for the goods, valid until 11.59 p.m. on 09.11.2018. The petitioner contended that the goods reached the destination before the e-way bill expired, but due to the driver falling asleep, they were not unloaded. On 10.11.2018, at 6:15 a.m., the respondent seized the goods and issued a notice under Section 129(3) of the CGST Act, 2017, demanding tax and penalty of Rs. 2,30,186/- each. The petitioner's reply, stating the goods reached the destination prior to the e-way bill's expiry, was disregarded. The petitioner's appeal to the Joint Commissioner of Commercial Taxes (Appeals-2) was dismissed by an order dated 22.01.2020. The petitioner then filed a writ petition before the High Court challenging both orders.

Key Issues

1. Whether the impugned orders passed by the respondent authorities are illegal and arbitrary for failing to consider crucial evidence regarding the timely arrival of the goods at the destination prior to the expiry of the e-way bill, as required under Section 129 of the CGST Act, 2017? Petitioner's contentions: The petitioner argued that the goods reached the destination much before the e-way bill expired on 09.11.2018 at 11:59 p.m. They relied on an endorsement from JAS Toll Road Company Limited, confirming the vehicle passed the Nelamangala Toll Plaza (30 km from the destination) at 3:55 p.m. on 09.11.2018, indicating arrival at the destination well before the expiry. They cited the case of M/S Hemanth Motors vs. State of Karnataka & Others to support the contention that if goods reach the destination before the e-way bill expires, the seizure and subsequent orders are illegal. The petitioner contended that both the Commercial Tax Officer and the Joint Commissioner failed to consider this crucial evidence. Revenue's contentions: The learned AGA supported the impugned orders, arguing that the material on record indicated the vehicle had not reached its destination point prior to the e-way bill's expiry at 11:59 p.m. on 09.11.2018, and it was intercepted at 6:15 a.m. on 10.11.2018, much before reaching its destination. Therefore, the orders were just and proper.