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GST Update no 63rd on detention of goods due to expiry of E-Way Bill

GST Update no 63rd on detention of goods due to expiry of E-Way Bill
The presence of valid e-way bill with the goods is extremely important as even a minor mistake either in e-way bill or its expiry may lead to invocation of the provisions contained in section 129 of the CGST Act, 2017. At times, the validity of e-way bill gets expired on account of genuine reasons but the detaining officer takes the situation very strictly without even considering the adverse consequences of detention on the assessee. Recently, a similar situation was observed in the case of NE Equipment Solutions Pvt Ltd, wherein the goods were detained by the GST officers on the allegation that the validity of e-way bill had expired inspite of the fact that the new e-way bill was already generated by the assessee. The outcome of this decision is the subject matter of discussion of our present update. The petitioner is an engaged in the business of dealing in TATA Hitachi Construction Machinery. In the course of the business, the petitioner sold one TATA Hitachi Hydraulic Excavator and issued tax invoice with appropriate GST & generated e-way bill with a validity period. The same machinery was transported in truck and during the transportation of the vehicle, the transport department of the State of Tripura detained the vehicle on the ground that the excavator had no registration in the State of Tripura which was violative of Section 192A of the Motor Vehicles Act and petitioner paid the penalty amount to get their vehicle released. In the meantime, the validity of the e-way bill had expired and GST Department also checked e-way bill at the same check post. GST Department has detained the vehicle on the ground that the driver did not have a valid e-way bill for the machinery being brought in the State. The Petitioner has also generated fresh e way bill but GST department has refused to accept the same. Hence, the petitioner approached the High Court for the release of the machinery. The division bench noted that the government has earned substantial tax as the machinery is worth Crore and there is no allegation of tax. As such, detaining such machinery at the check post would expose it to deterioration particularly in the present season of heavy rainfall. The purchaser of goods has also suffered for not getting the delivery as its projects must be at hault. The Hon’ble High Court opined that asthere is option of releasing the machinery on provisional basis, the same should be done immediately; with determination of total liability to be done after providing the opportunity of personal hearing and issuance of show cause notice to the petitioner. Therefore, the Hon’ble High Court has ordered to release the machinery upon the petitioner filing an undertaking before this Court that eventually subject to appeal and further right to challenge the order of assessment, if any tax or penalty liability is crystallized, the petitioner would discharge the same. The above decision depicts the harassment suffered by the assessee inspite of genuine intention of complying with the laws. In the present case, due to unforeseen and unavoidable circumstances that were beyond the control of the assessee, the validity of eway bill expired and extension could not be sought by them. As a result, since there was no remedy available on expiry of e-way bill to the assessee, new e-way bill was generated but inspite of this, the machinery was detained. There was no suspicion of evasion of tax but goods are being detained without considering the genuine practical difficulties faced by the assessees. Detention of goods for frivolous grounds is a serious concern of assessees which should be adequately dealt by the government by issuing suitable clarification in this regard. It is pertinent to mention that there is circular wherein it has been clarified that for minor breaches in e-way bill such as typographical error in 2 digits of invoice/vehicle number should be condoned and provisions of section 129 should not be invoked against assessee but the favourable clarifications are seldom followed by the departmental authorities.
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Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com