Ratnaka Enterprises And Anr. vs. State Of West Bengal And Ors.
Original PDF →Facts
The petitioners, Ratnaka Enterprises and another, filed a writ petition challenging the imposition of a 200% penalty under Section 129(1)(a) of the West Bengal Goods and Services Tax Act, 2017. The penalty arose from the expiry of an E-Invoice and E-Waybill on October 1, 2023, while goods were in transit. The petitioners contended that the delay was due to reasons beyond their control, specifically traffic restrictions imposed by the Deputy Commissioner of Police, and that there was no intent to evade tax. They argued that the expiry date falling on a Sunday followed by a national holiday further supported their claim of no malafide intention. The goods were transported under a valid E-Waybill, and all documents were in order. The respondent authorities imposed the penalty, stating the E-Waybill was invalid at the time of interception and that the petitioners failed to revalidate it.
Held
The Court held that the petitioners had made out a prima facie case for intervention. It found that the penalty imposed was solely for the non-extension of the E-Waybill and that imposing a 200% penalty for failing to reach the destination within the validity period, without considering the reasons for the delay, was a violation of the principles of natural justice. Citing the Division Bench judgment in Hindusthan Biri Leaves (Supra), the Court observed that even if an extension of the E-Waybill is sought beyond the statutory period, such extension should be allowed by condoning the delay. Consequently, the Court directed the appropriate authorities to refund the penalty amount of Rs. 12,77,812/- to the petitioners. The petitioners were directed to file an application before the proper officer within two weeks, and the refund was to be processed forthwith, preferably within 10 weeks of the application's filing. The Court disposed of the writ petition without going into the merits of the case, deeming the allegations not admitted by the respondents as no affidavits were called for.
Key Issues
1. Whether the imposition of a 200% penalty under Section 129(1)(a) of the West Bengal Goods and Services Tax Act, 2017, is sustainable solely on the ground of an expired E-Waybill, without establishing an intent to evade tax? 2. Whether the delay in transportation, caused by traffic restrictions and occurring on a weekend and national holiday, constitutes a valid reason for condonation and prevents the imposition of a 200% penalty? Petitioner's Arguments: The petitioners argued that Section 129(1)(a) does not automatically lead to a 200% penalty upon mere expiry of an E-Waybill. They contended that intent to evade tax is a necessary ingredient. They further submitted that the delay was attributable to traffic restrictions imposed by the authorities and the expiry falling on a Sunday and a national holiday, making an allegation of malafide intention unsustainable. They relied on the judgment in Hindusthan Biri Leaves & Anr. vs. Assistant Commissioner of State Tax, Bureau of Investigation, Durgapur Zone & Ors., particularly paragraphs 10-12, which dealt with similar facts and the imposition of 200% penalty. Revenue's Arguments: The State respondents argued that the E-Waybill was invalid at the time of interception, and the vehicle was rightly penalized. They further submitted that the petitioners failed to take steps to revalidate the expired E-Waybill.
Sections Cited
Section 129(1)(a)
AI-generated summary — verify with the full judgment below
2026
Court No.10
DL/Item No.–22
[Milan] ….for the Petitioners
Ms. Manju Agarwal, Ld. AGP., Ms. Ranjana Chatterjee, Mr. Bijitesh Mukherjee, Ms. Manasi Mukherjee
….for the State/Respondents
The present Writ Petition pertains to imposition of penalty @200% of tax under Section 129 (1a) of the West Bengal Goods and Services Tax Act, 2017, consequent upon expiry of E-Invoice No. RE/23-24/528 dated 26th September 2023 and E-Waybill No. 86134792638 dated 26th September 2023 valid upto midnight of 1st October 2023. 2. It is the case of the petitioners that the delay occurred due to reasons beyond their control and without any intent to evade tax. It is further submitted that the goods were transported under cover of a valid E-Waybill.
The Learned Counsel for the petitioners submit that penalty under Section 129 (1a) of the said act does not ensue automatically upon the mere expiry of the E-Waybill, and intent to evade tax is an essential ingredient for imposition of penalty @ 200%.
It is further submitted that in the present case, each and every document was maintained in order and the expiry of
2 the E-Waybill occurred due to traffic restrictions imposed by the Deputy Commissioner of Police. Since the date of expiry was a Sunday followed by a national holiday, an allegation of malafide intention to evade tax is unsustainable and the penalty imposed upon the petitioners is liable to be set aside.
It is further submitted that the respondent authorities have imposed penalty, despite the delay being occasioned by traffic restrictions. The petitioners cannot be penalized for a lapse attributable to the traffic department and the respondent authorities.
The Learned Advocate for the petitioners has already explained the reasons in paragraphs 11 of the Writ Petition and places reliance on paragraph nos. 10 to 12 of a judgment of the Division Bench of this Court in the case of Hindusthan Biri Leaves & Durgapur Zone & Ors. The relevant paragraphs 10 to 12 are set out herein below:
“10. In Progressive Metals Private Limited (supra) more or less similar facts were considered by the Court and after taking note of Rule 138 of the W.B.G.S.T. Rules, which allows the transporter 08 hours time to seek for extension and if such allowance was granted in the facts and circumstances of the case, the delay 01 hour and 35 minutes though in the case on hand, the delay after giving the 08 hours allowance, is 17 hours, the revenue has not been able to demonstrate lack of bona fides on the part of the appellants.
Therefore, we are of the clear view that the case on hand is not one such case, where 200% penalty could have been imposed.
Accordingly, appeal and the writ petition are allowed and the orders passed by the appellate authority and the original authority are set aside and the appropriate authority of the Department is directed to refund the penalty recovered from the
3 appellants upon an application being filed by the appellants within eight weeks from the date of filing such application.”
The Learned Advocate for the state respondent authorities vehemently opposes the submission of the petitioners and submits that at the time of interception the E-Waybill of the petitioners was found to be invalid. The vehicle was intercepted by the respondent No. 3 being the Deputy Commissioner of Police at Taraganj Club in Coochbehar. The concerned respondent authorities has, therefore, rightly imposed penalty upon the petitioners.
The Learned Advocate for the state respondent further submits that the petitioners failed to take any steps to revalidate the E-Waybill which had already been expired and became invalid.
Heard both the parties and upon perusing the materials on record, this Court is satisfied that the petitioners have been able to make out a prima facie case for intervention at the stage. This Court has taken judicial notice of all documents annexed to the Writ Petition including the judgment relied upon by the petitioners and is of the considered view that the entire penalty imposed upon the petitioner pertains only to non-extension of E-Waybill, and imposition of penalty @ 200%, for failure to reach the destination within the validity period is in violation of the principles of natural justice.
The Division Bench of this Hon’ble Court in Hindustan Biri Leaves (Supra) has observed that even if a transporter seeks extension of the E-Waybill beyond the statutory period, such extension shall be allowed by condoning the delay in
4 seeking the same. In light of the said observation, this Court directs the appropriate authorities to refund the penalty amounting to Rs. 12,77,812/- (Rupees Twelve Lacks Seventy Seven Thousand Eight Hundred Twelve only) as evidenced by the challan being annexure P9 at page 63 of the Writ Petition.
The petitioners are directed to file an application before the proper officer within a period of two weeks from date and the penalty of Rs. 12,77,812/- (Rupees Twelve Lacks Seventy Seven Thousand Eight Hundred Twelve only) recovered from the petitioners shall thereafter be refunded forthwith, preferably within a period of 10 weeks from the date of filing of such application by the petitioner.
With the above observations, the writ petition being WPA 24249 of 2024 is disposed of accordingly without going into the merits of the case.
Since I have not called for any affidavits, the allegations contained in the writ petition are deemed to have not been admitted by the respondents.
Urgent photostat certified copy of this order, if applied for, be given to the parties upon compliance of all necessary formalities.
(Smita Das De, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.