M/S Vishalfab (INDIA) PVT. LTD Unit 2 vs. The State Of Madhya Pradesh

Held

The Court held that the failure to furnish Part-B of the E-Way bill, which includes the vehicle number, renders the E-Way bill incomplete and invalid for the movement of goods. The Court referred to Rule 138(2) of the MP GST Rules, 2017, which states that a registered person shall generate the E-Way bill after furnishing information in Part-B. The Court found that the petitioner, as the registered person, had the primary duty to generate Part-B. The fact that Part-A was generated and IGST was paid did not absolve the petitioner of this responsibility. The Court noted that the E-Way bill generated by the petitioner explicitly stated 'Not Valid for Movement as Part B is not entered'. The Court also observed that for two days, neither the petitioner nor the transporter generated or uploaded Part-B, despite the goods being in transit for a significant distance (800 km). This delay was not considered a minor mistake but a failure to comply with mandatory provisions. Therefore, the Court concluded that the impugned order passed by the respondent authority was just and proper and did not warrant interference. The petition was dismissed.

Facts

The petitioner, M/s. Vishalfab (India) Pvt. Ltd. Unit 2, challenged an order dated 06.06.2022 by the Appellate Authority and Joint Commissioner, State Tax Headquarters, Indore. This order upheld a demand of IGST and penalty of Rs. 2,99,208/- imposed by the adjudicating authority. The petitioner imported machinery and paid IGST of Rs. 1,48,524/-. They hired a transporter and generated an E-Way bill on 09.08.2018. The truck was intercepted on 11.08.2018. While no other irregularity was found, objection was raised regarding the non-filing of Part-B of the E-Way bill, specifically the vehicle number. Consequently, the goods were seized under Section 129(1) of the GST Act, and a notice was issued proposing IGST and an equal penalty. The petitioner furnished a bank guarantee for Rs. 2,99,208/- for the release of goods and the vehicle. The adjudicating authority confirmed the tax demand and penalty, deeming the E-Way bill invalid without Part-B. The petitioner's appeal was dismissed by the appellate authority.

Key Issues

1. Whether the failure to furnish Part-B of the E-Way bill, specifically the vehicle number, renders the E-Way bill invalid and justifies the detention, seizure, and imposition of tax and penalty under Section 129 of the GST Act, despite Part-A being generated and IGST being paid? (Question of law) Petitioner's arguments: The petitioner contended that they had already paid the GST in advance and disclosed all particulars in Part-A of the E-Way bill. They argued that it was the transporter's duty to fill Part-B, and they were wrongly penalized. They relied on judgments where penalties were set aside due to no intention to evade tax (Assistant Commissioner (ST) vs. Satyam Shivam Papers Pvt. Ltd.) or bonafide mistakes in E-Way bills (Technosteel Infraprojects Pvt. Ltd. vs. State of Madhya Pradesh, Robbins Tunnelling & Trenchless Technology (India) Pvt. Ltd. vs. State of M.P.). Respondent's arguments: The respondent argued that Rule 138 of the MP Goods and Service Tax Rules, 2017, mandates the generation of E-Way bills for goods exceeding Rs. 50,000/-. They asserted that Part-B, containing critical vehicle details, is essential for a valid E-Way bill. The absence of Part-B makes the E-Way bill incomplete and invalid, justifying action under Section 129. They cited M/s Gati Kintetsu Express Pvt. Ltd. vs. Commissioner, Commercial Tax of M.P. & Ors., which held that Part-B is mandatory and its non-uploading renders the E-Way bill invalid, not a minor technical error.