Tirthamoyee Aluminium Products vs. State Of Tripura And 4 Ors

Held

The Court held that the Inspector of State Tax did not have the power to demand GST with penalty in this case. The Court found that the defect in the E-way bill was a result of a minor oversight and a clerical error, specifically the incorrect distance of 470 Kms instead of 1470 Kms. The Court noted that the goods were accompanied by an invoice and were duty-paid. The Court referred to Circular No. 64/38/2018-GST dated September 14, 2018, issued by the Central Board of Indirect Taxes and Customs, which clarifies that proceedings under Section 129 of the CGST Act should not be initiated in cases of minor discrepancies, such as an error in one or two digits of a document number mentioned in the E-way bill. While the circular specifically mentions document numbers, the Court applied the spirit of the circular to the clerical error in distance, especially given the supporting affidavits from the Central Government and Hindalco. The Court also found that the order suffered from gross irregularity as it was passed on the same day the notice for personal hearing was issued, without granting the petitioner an opportunity to be heard. Therefore, the impugned order dated November 5, 2018, was set aside.

Facts

The petitioner, Tirthamoyee Aluminium Products, challenged an order dated November 5, 2018, passed by the Inspector of State Tax. The order demanded CGST of Rs. 1,48,425/- and SGST of Rs. 1,48,425/-, along with penalties of Rs. 4,12,291/- under CGST and SGST Acts, 2017. The petitioner purchased aluminium products from Hindalco Industries Ltd. for Rs. 19,46,014/-, to be transported from Kolkata to Agartala. Hindalco generated an E-way bill on October 25, 2018, but due to a clerical error, the distance was shown as 470 Kms instead of the actual 1470 Kms. This resulted in the E-way bill having a validity of five days instead of the correct fifteen days. The goods arrived at the Tripura border on November 5, 2018, where they were intercepted, and a detention memo was issued for not having a valid E-way bill. A show cause notice was issued, requiring the petitioner to appear on November 19, 2018, but the impugned order was passed on the same day, November 5, 2018.

Key Issues

1. Whether the Inspector of State Tax had the power to demand GST and penalties when the E-way bill expired due to a minor clerical error in stating the distance, and if so, under which provisions of the CGST Act, 2017? Petitioner's arguments: The petitioner contended that the expired E-way bill was a result of a clerical error and should not lead to any tax liability or penalty. They relied on affidavits from the Central Government and Hindalco supporting the claim of a minor clerical error. They also argued that the order was passed without granting a proper hearing, as the notice for hearing was for November 19, 2018, while the order was passed on November 5, 2018. Revenue's arguments: The State Government argued that the transporter was carrying goods without a valid E-way bill, and the Tax Inspector was justified in demanding taxes and penalties. They also contended that the petitioner had not availed the statutory appeal remedy available against the impugned order.