M/S Nezone Tubes Limited Through Its General Manager Shri Madhu Kant Saraogi vs. The Union Of INDIA Through The Pr Commissioner Central Goods And Service Tax And Central Excise

Held

The Court held that the mere expiration of an e-Way Bill by a few hours, especially when the vehicle was intercepted very near to the destination and the expiry was attributed to the festive season (Diwali) preventing entry into the industrial area, does not constitute an intention to evade tax. The Court found no lack of bona fide on the part of the petitioner and no willful misconduct. Relying on previous judgments, including Hanuman Ganga Hydro Projects Private Limited and Rivigo Services Private Limited, the Court set aside the orders of the adjudicating authority and the Appellate Authority. The Court noted that the revenue had not considered the reason for the delay due to the festive season. The petitioner, having already paid the penalty, was held entitled to apply for a refund, which the competent authority was directed to consider within 8 weeks, provided there were no other legal impediments. The issue regarding the jurisdiction of the Central Taxes Officer under Section 20 of the IGST Act was not explicitly decided as the primary issue of tax evasion was resolved.

Facts

The petitioner, M/s. Nezone Tubes Limited, dispatched goods from West Bengal to Jamshedpur. The consignment was intercepted on November 6, 2021, by CGST & CX, Jamshedpur, because the e-Way Bill had expired on November 5, 2021. Physical verification confirmed no discrepancy in goods description or quantity. The Assistant Commissioner, CGST & CX, Jamshedpur, imposed a tax and penalty of Rs. 5,18,660/- under Section 129(3) of the CGST Act, 2017, solely on the ground of the expired e-Way Bill. The petitioner paid the demand to secure the release of goods and vehicle. An appeal to the Joint Commissioner (Appeals) was dismissed, upholding the Assistant Commissioner's order. The petitioner then filed a writ petition before the High Court challenging these orders.

Key Issues

1. Whether the expiry of an e-Way Bill during transit, without any intention to evade taxes, would attract the provisions of Section 129 of the Central Goods and Services Tax Act, 2017, and Rule 138 of the Central Goods and Services Tax Rules, 2017? The petitioner argued that mere expiration of the e-Way Bill by a few hours, in the absence of any intention to evade taxes or contravention of the Act, should not lead to the invocation of Section 129. They contended that all other documents, including the e-Way Bill, were genuine. The revenue argued that the petitioner was afforded an opportunity for personal hearing and that the order was issued in accordance with Section 129 of the CGST Act, 2017, and relevant rules, citing that the petitioner's authorized representative did not wish to submit anything further on the issue. 2. Whether the Central Taxes Officer was justified in initiating and passing an order under Section 129 of the Act in relation to an inter-state transaction, considering Section 20 of the Integrated Goods & Services Tax Act?