Novateur Electrical and Digital Systems Pvt. Ltd. Vs Addl. Commissioner of State Tax Appeals cum Appellate

FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURTv

1. Petitioner-Company has approached this Court by filing the present writ petition for issuance of writ in the nature of certiorari for quashing order dated 09.01.2020 (P-5)

2. The facts as stated in the petition are that petitioner had sold electrical goods worth Rs. 33,82,363/-, vide Invoice nos. 109237/DSI, dated 24/10/2018, 109238/DSI dated 24/10/2018 & 109239/DSI dated 24/10/2018 to M/s. Setia  Electricals India Pvt. Ltd., Gurugram and Rs.3,38,037/- vide invoice  no.109243/DSI dated 24/10/2018 to Rameshwar Traders, Gurugram.

3. On 26/10/2018, when the goods were being transported from Delhi to Gurugram, the truck carrying the goods was intercepted by the road side checking squad of the state tax enforcement, Gurugram and the AC mobile squad, Haryana  state GST seized the goods on the ground that Part B of the four E-Way Bills  accompanying the goods were not duly completed.

4. The regular employee in-charge of E-Way Bill generation was on leave and the standby staff was not fully conversant with the E Way Bill downloading procedure. That, as such, the standby staff generated the E-Way Bills  without completely filling Part B of the document. That he finally dispatched the  goods along with the 4 invoices and the 4 corresponding EWay Bills with their  Part B incomplete.

5. The petitioner was maintaining regular books of accounts and paying their taxes on a regular basis. The afore-stated transaction has been entered in their books of account and the details are verifiable from relevant printouts of their  account books. The petitioner is registered under GST Law in 25 states of India  and is having a turnover of Rs. 2,600 Crores approximately.

6. The petitioner was initially issued a Show Cause Notice dated 28.10.2018 (P-1) to which they replied on 31.10.2018 (P-2) but their reply was not taken into consideration by the AETO, Gurugram.

7. The Assistant Excise and Taxation Officer, Gurugram, Haryana State GST vide his Penalty Order dated 31st October, 2018 imposed a pre-deposit of 100 percent tax amounting to Rs.6,69,672/- and penalty of equivalent amount by invoking Section 129 (1) (a) of HGST Act read with Section 20 of the IGST Act.  The copy of the penalty order in FORM MOV-09 is attached as Annexure P-3.

8. Aggrieved against the above said order, the petitioner preferred an appeal before the Additional Commissioner of State Tax (Appeals)-cum-Appellate Authority, Haryana, Panchkula (P-4) and the same was dismissed on 09.01.2020  (P-4). Hence the present writ petition

9. On notice of the petition, a written statement was filed on behalf of respondent No. 1 stating therein that it is a case of gross violation of Section 68 of CGST/HGST Act read with Rule 138-A of CGST/HGST Rules, 2017 which  requires that the person in charge of a conveyance carrying any consignment of goods of value exceeding Rs.50,000/- should carry a copy of documents viz  invoice/bill of supply/delivery challan/bill of entry and valid e-way bill in physical  or electronic form for verification. In case such person does not carry the  mentioned documents, there is no doubt that a contravention of the provisions of  the law takes place and the provisions of non-furnishing of information in part-B  of form GST EWB-01 amounts to the e-way bill incoming not a valid document  for the movement of goods by road as per Explanation 2 to Rule 138 (3) of the  CGST/HGST Rules. Further it has been submitted that during the course of  roadside checking on 26.10.2018, a team headed by Hanuman Singh, Asstt Excise  and Taxation Officer cum Proper Officer of the State Tax (Enf) Gurugram (West)  checked a vehicle no DL1LV-9214 at Old Railway Road, Gurugram carrying  Electrical Goods from New Delhi to Gurugram. On demand, the driver-cum person in-charge of the vehicle produced the documents as mentioned in para No.  3 of the reply. Further it has been stated that the petitioner had himself admitted  that their staff had generated the E-way bills without completely filling Part B of  the documents. Non-filing of part B of the documents is a gross violation of the  provisions of law.

10. Learned counsel for the petitioner at the very outset has referred to circular dated 14.09.2018 (P-6) wherein it has been stated that in case of technical errors in the documents accompanying the goods during their transportation, the  provisions of Section 129 of HGST Act may not be resorted to, but instead the  goods may be released on payment of nominal penalty under Section 125 of the  GST Act.

11. Learned counsel has argued that when the driver of the vehicle was intercepted, he produced invoice and E-way bill Part-A slip. However, It was found that Part B of Unique No. 731037090912, 731037090913, 731037090914 dated 25.10.2018 and 731037090918 dated 25.10.2018 were not  entered/completed. But the driver of the vehicle thereafter filled Part B in the  presence of Officer.

12. On the other hand, learned counsel for the respondent has argued that the appellant had violation the provisions of Section 68 of the Act ibid and Rule 138 of the Rules framed thereunder. Neither the transporter nor appellant supplier  of the goods uploaded/completed Part B of the E way bill as required under  Section 68(3) of the Act, 2017 and Rule 138 (1), (2), (3) of the Rules, 2017. As per  Rule 138 of the Rules ibid, consignor, consignee or transporter can upload E-way  bill Part A and Part B. However, the circular dated 14.09.2018 has not been  disputed.

13. Heard.

14. Reference at the very outset can be made to circular dated 14.09.2018 (P-6). The relevant part of the circular reads as under:-

a) Spelling mistakes in the name of the consignor or the consignee but the (STIN, applicable, is correct; 

b) Error in the pin-code but the address of the consignor and the consignee mentioned correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the way hill  

c) Error in the address of the consignee to the extent that the locality and other details of the consigner are correct; 

d) Error in one or two digits of the document number mentioned in the my bill 

e) Error in the 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of the tax mentioned is correct. 

f) Error in one or two digits/characters of the vehicle no.  

15. The case of the petitioner falls under clause (f) as he has not mentioned the vehicle no in part B of Unique No. 731037090912, 731037090913, 731037090914 dated 25.10.2018 and 731037090918 dated 25.10.2018. It is not in  dispute that if the case of the petitioner falls under the above conditions mentioned  in the circular dated 14.09.2018, then proceedings under Section 129 of  HGST/CGST Act should not have been initiated.

16. In the facts of the present case, at the time of search of the vehicle of the petitioner, Part B was not filled up but the time driver filled up Part B in the presence of the Officer and hence there was no malafide intention on the part of the  petitioner. Accordingly, proceedings under Section 129 of HGST/CGST Act  should not have been initiated, as per circular dated 14.09.2018 (P-6). The object  of circular dated 14.09.2018 was that in case of circumstances as detailed in the  circular, which were procedural in nature and there no intention of misleading the  transfer of goods, the proceedings should not have been initiated under Section 129  of HGST/CGST Act. Apart from not mentioning number of the vehicle in Part B,  all the other documents have been shown by the driver of the vehicle.

17. In view of the above fact, the present petition is allowed. Order dated 09.01.2020 (P-5) is set aside. A penalty of Rs.500/- is imposed upon the petitioner for not mentioning the number of the vehicle, as per circular dated 14.09.2018  (P-2).