M/S Western Carriers (INDIA) Limited vs. The State Of Tripura And Ors

Facts

M/s Western Carriers (India) Ltd., a registered transporter, was booked for a consignment from ONGC, Kolkata, to ONGC, Tripura. An E-Way Bill was generated on 25.09.2021, but inadvertently, the vehicle class was mentioned as 'ODC' instead of a normal vehicle. The vehicle was intercepted on 05.10.2021 by the enforcement wing in North Tripura. During inspection, no wrong consignment was found, only the incorrect vehicle class description. Consequently, tax and penalty were imposed. To release the urgent operational spare of ONGC, the petitioner had to execute a bond and a bank guarantee worth Rs. 40,85,488/- in favour of the Superintendent of State Tax, Churaibari Enforcement Wing.

Held

The High Court disposed of the writ petition with a liberty granted to the petitioner to file an appeal against the impugned action of the respondents. The Appellate Authority was directed to consider the matter in its entirety, including the issue pending before the Hon'ble Supreme Court, before deciding the appeal. Furthermore, the Court directed that the bank guarantee furnished by the petitioner shall continue until the appeal is decided. The Court did not decide on the merits of the imposition of tax and penalty but provided a procedural remedy.

Key Issues

1. Whether the inadvertent mistake in mentioning the vehicle class as 'ODC' instead of a normal vehicle in the E-Way Bill warrants the imposition of tax and penalty, especially when no wrong consignment was detected and the proper tax was already paid on the shipment? 2. Whether the imposition of tax and penalty is justified when the petitioner contends that for such a minor anomaly, only a fine of Rs. 10,000/- can be imposed without detention of the vehicle, and that there should not be a double imposition of tax and penalty? Petitioner's arguments: The petitioner argued that there was no suppression of invoices or delivery challans. They contended that a minor anomaly in the vehicle class description in the E-Way Bill should not invite the imposition of tax and penalty, and that only a fine of Rs. 10,000/- could be levied without detention. They also argued against double imposition of tax and penalty. Revenue's arguments: The revenue argued that the vehicle was a normal vehicle, and it was wrongly stated as 'ODC' in the E-Way Bill to avail benefits. They also noted that the subject of penalty was under challenge before the Supreme Court.