M/S Sri Gopikrishna Infrastructure PVT. LTD vs. The State Of Tripura And Ors

Held

The Court held that the breach of transporting taxable goods without a valid e-way bill clearly falls within the ambit of Section 122(xiv) of the CGST Act, making the petitioner liable for a penalty. However, the Court found that the Superintendent of State Tax had exceeded his jurisdiction in imposing a penalty equivalent to the tax amount. The Court reasoned that for a breach under Section 122(xiv), the penalty is fixed at Rs. 10,000/-. Penalties equivalent to the tax amount are applicable in cases of tax evasion or non-deduction. The Court noted that the petitioner had claimed to have paid the tax, but did not accept this statement at face value, allowing the revenue authority to verify the payment. The Court set aside the penalty order of Rs. 3,56,990/- and directed the petitioner to pay a penalty of Rs. 10,000/- within one month. The Court did not address the tax amount directly, stating that the revenue authority could verify its payment and take appropriate action if it remained unpaid.

Facts

The petitioner, M/s Sri Gopikrishna Infrastructure Pvt. Ltd., challenged an order passed by the Superintendent of State Tax, Churaibari Enforcement Wing, North Tripura. The order determined the petitioner's CGST and SGST liability at Rs. 3,56,990/- and imposed an equivalent penalty of Rs. 3,56,990/- for failing to produce a valid e-way bill for a consignment. The petitioner explained that the vehicle broke down during the nationwide lockdown, necessitating trans-shipment. They attempted to amend the e-way bill, but the system did not allow it due to the expiry of the original bill and the lockdown situation. The goods in transit matched the invoice details, consignee, and consigner information.

Key Issues

1. Whether the imposition of penalty under Section 129(3) of the CGST Act, 2017, for failure to carry a valid e-way bill, equivalent to the tax amount, was justified, considering the circumstances of a nationwide lockdown and a breakdown of the original vehicle leading to trans-shipment? Petitioner's arguments: The petitioner contended that the breach, if any, falls under Section 122(xiv) of the CGST Act, which deals with transporting taxable goods without specified documents. They argued that the penalty imposed by the Superintendent of State Tax exceeded his authority under Section 126 of the CGST Act, as the penalty should have been proportionate to the omission, especially when there was no fraudulent intention or gross negligence, but rather a lapse under abnormal lockdown circumstances. They also claimed the tax had already been paid. Revenue's arguments: The revenue argued that the breach was indeed covered under Section 122(xiv) of the CGST Act. However, they asserted that the petitioner committed gross negligence by not upgrading or amending the e-way bill when the original expired in transit. They maintained that the penalty was imposed correctly as per law for not tendering a valid e-way bill and that there was no irregularity or lack of proportionality. The revenue did not specifically deny the petitioner's claim of tax payment.