GST-Vehicles cannot be detained because of following 2 reasons
An e-way bill is required whenever a registered person transports items valued at more than Rs 50,000 in India (Statewise the limit differs). The right official has the authority to halt the movement of goods. The relevant documentation must be carried by the driver of a vehicle carrying products worth more than Rs (i.e. invoice and an e-way bill). The right official can inspect the paperwork and products after interception.
The department has issued circular which states the various procedure to be adopted for interception of conveyances for inspection of goods in movement, and detention, release and confiscation of such goods and conveyances was specified.
Further there is also a land mark judgement for cases in which Vehicles cannot be detained. The article is covering both circular and landmark case of M/s K.B Enterprises Vs Assistant Commissioner (GST Appellate Authority, Himachal Pradesh)
Kind attention is invited to Circular No. 41/15/2018-GST dated 13th April, 2018 as amended by Circular No. 49/23/2018-GST dated 21st June, 2018 vide which the procedure for interception of conveyances for inspection of goods in movement, and detention, release and confiscation of such goods and conveyances was specified.
2. Various representations have been received regarding imposition of penalty in case of minor discrepancies in the details mentioned in the e-way bill although there are no major lapses in the invoices accompanying the goods in movement. The matter has been examined. In order to clarify this issue and to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’) hereby clarifies the said issue hereunder.
3. Section 68 of the CGST Act read with rule 138A of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as ‘the CGST Rules’) requires that the person in charge of a conveyance carrying any consignment of goods of value exceeding Rs 50,000/- should carry copy of documents viz., invoice/bill of supply/delivery challan/bill of entry and a 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 section 129 and section 130 of the CGST Act are invocable. Further, it may be noted that the non-furnishing of information in Part B of FORM GST EWB-01 amounts to thee-way bill becoming not a valid document for the movement of goods by road as per Explanation(2) to rule 138(3) of the CGST Rules, except in the case where the goods are transported for a distance of upto fifty kilometres within the State or Union territory to or from the place of business of the transporter to the place of business of the consignor or the consignee, as the case may be.
4. Whereas, section 129 of the CGST Act provides for detention and seizure of goods and conveyances and their release on the payment of requisite tax and penalty in cases where such goods are transported in contravention of the provisions of the CGST Act or the rules made thereunder. It has been informed that proceedings under section 129 of the CGST Act are being initiated for every mistake in the documents mentioned in para 3 above. It is clarified that in case a consignment of goods is accompanied by an invoice or any other specified document and not an e-way bill, proceedings under section 129 of the CGST Act may be initiated.
5. Further, in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under section 129 of the CGST Act may not be initiated, inter alia, in the following situations:
a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, wherever applicable, is correct;
b) Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill;
c) Error in the address of the consignee to the extent that the locality and other details of the consignee are correct;
d) Error in one or two digits of the document number mentioned in the e-way bill;
e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct;
f) Error in one or two digits/characters of the vehicle number.
6. In case of the above situations, penalty to the tune of Rs. 500/- each under section 125 ofthe CGST Act and the respective State GST Act should be imposed (Rs.1000/- under the IGST Act) in FORM GST DRC-07 for every consignment. A record of all such consignments where proceedings under section 129 of the CGST Act have not been invoked in view of the situations listed in paragraph 5 above shall be sent by the proper officer to his controlling officer on a weekly basis.
7. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow.
2. Case Law :
Case Name: M/s K.B Enterprises Vs Assistant Commissioner (GST Appellate Authority, Himachal Pradesh)
Minor mistake in e-way bill cannot lead to the imposition of a penalty
E Way Bill is an Electronic Way bill for movement of goods to be generated on the eWay Bill Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs. 50,000 (Single Invoice/bill/delivery challan) without an e-way bill that is generated on ewaybillgst.gov.in. Alternatively, Eway bill can also be generated or cancelled through SMS, Android App and by site-to-site integration through API. When an eway bill is generated, a unique E way Bill Number (EBN) is allocated and is available to the supplier, recipient, and the transporter.
E way bill must be generated when there is a movement of goods of more than Rs 50,000 in value to or from a registered person. A Registered person or the transporter may choose to generate and carry eway bill even if the value of goods is less than Rs 50,000. In case goods are moved without generating a valid e-way bill, the authorities may impose a penalty of 10,000 INR or amount of tax sought to be evaded, whichever is higher.
Fact and Issue of the case
The appellant M/s K.B Enterprises is registered taxpayer vide GSTIN 02AEQPG0186F1ZS and is engaged is supply of taxable goods falling under chapter 24 of GST Tariff Act. The nature of business is wholesale and retail business. That the appellant had sold Beedi having chapter heading 2403 vide invoice number KBE/1073 dated 29.11.2018 total value of Rupees 8,76,604 and levying CGST and SGST for Rs. 1,22,727/- each. The Vehicle No. HP 32A 3097 was carrying goods to transport the same to the purchasing dealer M/s Kaka Ram, Radhey Shyam Chamba, having GSTIN 02AANPL8404E1ZZ. That the said vehicle was intercepted for checking by the Assistant Commissioner of State Taxes & Excise Chamba, and his staff on dated 01.12.2018. The driver/person in-charge of the vehicle had tendered the documents accompanying the vehicle such as invoice, Goods Receipt Note, E-way Bill in respect of the consignment. That on scrutiny of the documents provided by the driver person/in- charge of the vehicle, the ACST&E found all the documents were in order except the mistake in vehicle no. mentioned as HP 32A1597 in part —B of the E — Way Bill No. 301067898208. That the goods were detained by commercial tax officer vide detention order GST MOV-06 dated 01.12.2018 Under Section 129(1) of the CGST/HPGST Act. Accordingly, the appellant got present before the detaining authority and stated that inadvertently a clerical mistake got happened while generation of E-Way Bill. That the Ld. ACST&E did not heed to prayer and submission of the Appellant and imposed a penalty under section 129(1) of CGST/HPGST Act, 2017. Being aggrieved with the order, the Appellant filed the present appeal.
Observation of the Appellate Authority
Appellate Authority observed that penalty imposed under section 129 was unwarranted. GST Council vide circular No 64/38/2018 dated 14th September, 2018 and the HP circular no. 12-25/2018-19-EXN-GST-(575)-6009-6026 dated 13th March 2019 valid from 14-09-2018 in para 5 provides that in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under section 129 of the CGST Act may not be initiated in case of minor mistakes like an error in one or two digits/characters of the vehicle number. Further Para 6 of the said circular states that in case of minor errors mentioned in Para 5, penalty to the tune of Rs. 500/- each under section 125 of the CGST Act and the respective HPSGST Act should be imposed (Rs.1000/- under the IGST Act) in FORM GST DRC-07 for every consignment. The said circular and the subsequent notification under the HPGST Act have to be followed and the benefit cannot be denied to the appellant for paltry errors of two digits in the vehicle number. The eway bill has been duly generated and no mistake has been found in all other information entered in the EWB. The respondents have also not been able to prove beyond doubt nor submit any substantial evidence that the appellant was adopting the system of wrong mentioning of vehicle numbers in the EWB as their modus operandi to evade taxes. Appellate Authority thus held that minor mistakes in the e-way bill cannot lead to the imposition of penalty and set-aside the impugned order.
The Authority keeping in view the facts the orders of ACST&E, Chamba are set-aside on the ground that the standard operating procedure mentioned in Circular No 64/38/2018 dated 14th September, 2018 and the HP circular no. 12-25/2018-19-EXN-GST-(575)-6009-6026 dtd 13th March 2019 valid from 14-09-2018 was not taken into consideration while imposing penalty in the instant case. The additional demand deposited by the appellant may be refunded and the penalty of Rs 500/- under SGST and Rs 500/- under CGST under section 125 of CGST/HPGST Act, 2017 is imposed on the taxpayer in accordance to GST Circular.