Case Law: Failure to generate Eway-bill


THE ASSISTANT STATE TAX OFFICER, ERNAKULAM vs. M/S. INDUS TOWERS LIMITED

HIGH COURT OF KERALA

W.A.No.371 of 2018

Date: 13TH DAY OF JULY 2018

 

Issue:

Whether in the case of a transport, wherein obviously there is no tax liability on the goods, there could be a detention and seizure effected under Section 129 of the Central Goods and Services Tax Act, 2017 and Kerala State Goods and Services Tax Act, 2017 and a release ordered as provided under sub-section (1) or order passed under sub-section (3) of Section 129?

Facts

M/S. INDUS TOWERS LIMITED is engaged in the establishment of infrastructure for cellular telephone Companies, meaning the erection and activation of towers and other infrastructure for effective services of the mobile companies. For the purpose of such installation had imported from other States, batteries, which were stored in its go-downs at Ernakulam. These were to be installed in two sites at Gandhinagar at Kadavanthara and at Ambalappuzha. The vehicle in which the transport was made was detained. On examination of the documents, it was found that the goods were accompanied with a delivery chalan as provided under Rule 55 of the Kerala Goods and Services Tax Rules, 2017. However, the declaration as required under Rule 138 being KER-I (currently Eway-bill), was not seen uploaded or the print out accompanied with the goods. The detaining officer issued a notice detaining the goods against which the writ was filed before Kerala High Court when the vehicle was detained.

Decision:

Para 25 of the Judgment

25. ……… the assessee had known that the transport was one where there was no tax liability to the goods and had also issued a delivery challan under Rule 55. When a delivery challan is issued under Rule 55, it is a mandate under sub-rule (3) of Rule 55 that there should be a declaration as specified in Rule 138. The fact that there was no such declaration uploaded in the site as an intimation to the Department of the transport of such goods raises a reasonable presumption of attempt to evade tax, against the respondents herein. We cannot agree with the learned Single Judge that merely because there was no suspicion raised against the delivery challan there is an admission of non-taxability of the goods transported. The finding that the transaction would not fall within the scope of taxable supply under the statute, cannot be sustained for reason of there being no declaration made under Rule 138.

The resultant finding that mere infraction of the procedural rules cannot result in detention of goods though they may result in imposition of penalty cannot also be sustained. If the conditions under the Act and Rules are not complied with, definitely Section 129 operates and confiscation would be attracted. The respondents are entitled to an adjudication, but they would have to prove that in fact there was a declaration made under Rule 138 before the transport commenced. If they do prove that aspect, they would be absolved of the liability; otherwise, they would definitely be required to satisfy the tax and penalty as available under Section 129.

 We, hence, vacate the judgment of the learned Single Judge and allow the appeal. The vehicle and the goods having been already released unconditionally, further notice shall be issued and the adjudication under sub-section (3) completed; upon which if penalty is imposed, definitely the respondents would have to satisfy the same.

 


Posted on 02/08/2018
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