GST update No 178 on seizure of goods for expiry of E-way bill

The system of logistics and transportation in erstwhile regime was full of complex and bureaucratic procedures leading to difficulties in movement of goods from one point to another. The revolutionary concept of replacement of “Inspector Raj System” with “E-way Bill” was introduced with the objective of hassle-free movement of goods throughout the country. However, with the passage of time, there has been increase in the cases of detention and seizure of goods due to expiry of validity of E-way. One such issue was raised before the hon’ble Tripura High Court in the case of PODDER & PODDER INDUSTRIES PVT. LTD. regarding seizure of goods in case of expiry of E-way Bill. The analysis of the decision is the subject matter of discussion of our present update. The petitioner is engaged in supplying machinery for construction. The sold machinery which was transported through a truck was intercepted by the departmental authorities. The vehicle was carrying all the valid documents along with e-way bill. However, due to technical problems, the vehicle reached at the destination after a day and e-way bill had expired and goods were detained. The Counsel for petitioner submitted that the buyer purchased goods for carrying out contractual obligation and therefore prepared E-way bill. Hence, detention of goods subsequently has disrupted free- flow of goods and services within India. The Counsel for the revenue submitted that it is obligatory on the part of transporter to make necessary extension within prescribed time limit in E-way bill. Since, E-way bill was expired, there was no alternative available with the authority other than detention and seizure of goods at the check post. The Court held that any adverse impact on the free-flow of goods is to be discouraged as the Counsel for the department raised no question over the genuineness of the transaction. Moreover, it was further held that next question is whether vehicle having CA. PRADEEP JAIN ??www.capradeepjain.com??pradeep@capradeepjain.com??5 expired e-way bill should be seized or released by seeking an undertaking from the assessee. It was further opined that the transaction was between two registered dealers and therefore, there is no justification for stoppage in transit of vehicles and goods. Instead, an undertaking should be taken in this regard and intimation should be provided to the assessing officer. Any hinderance in the movement of goods amounts to obstacle in nation’s development. Therefore, it was held that undertaking or bond should be furnished to release the goods. The above decision has upheld the view that the tax authorities should make a clear distinction between deliberate tax evasion and technical or minor errors so that it is crystal clear that there is no intention of the taxpayer to evade tax. The Courts are flooded with various cases wherein it is held that expiry of E-way bill cannot be presumed as intention to evade tax if no mens-rea on the part of assessee is proved. To illustrate the same viewpoint was upheld in the decision imparted by Telangana High Court in the case of Satyam Shivam Papers Pvt Ltd. A sincere step from the Government is anticipated at the earliest in this regard

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GST update No 178 on seizure of goods for expiry of E-way bill

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