No tax evasion can be presumed on mere non-extension of validity of e-way bill due to traffic blockage and agitation

By:

The Hon’ble Supreme Court of India in Assistant Commissioner ST & Ors. v. Satyam Shivam Papers Pvt. Ltd. [Special Leave to Appeal (C) No(s). 21132/2021 dated January 12, 2022] affirmed the judgment passed by the Hon’ble Telangana High Court and held that, tax evasion cannot be presumed on mere non-extension of validity of e-way bill by the assessee due to traffic blockage and agitation, for which the Revenue Authority is responsible for not providing smooth passage of traffic. Further, imposed a sum of INR 69,000/- on the Revenue Department towards the cost payable to the assessee, and to be recovered, directly from the persons responsible.

Facts:

This petition has been filed by the Revenue Department (“the Petitioner”), being aggrieved of the judgment passed by the Hon’ble Telangana High Court in Satyam Shivam Papers Pvt. Ltd. v. Assistant Commissioner ST & Ors. [Writ Petition No. 9688 of 2020 dated June 2, 2021] wherein, the Court set aside the order passed by the Petitioner in Form GST MOV-09, imposing tax and penalty on Satyam Shivam Papers Pvt. Ltd. (“the Respondent”) due to the expiry of the e-way bill and deprecated the Petitioner for blatant abuse of power in detaining goods by treating validity of the expiry on the e-way bill as amounting to evasion of tax compelling the Petitioner to pay INR 69,000/- by such conduct. It was held that, no presumption can be drawn that there was an intention to evade tax on account of non-extension of the validity of the e-way bill by the Respondent. Further, directed the Petitioner to refund the amount collected from the Petitioner with interest @6% p.a. and imposed fine of INR 10,000/- payable to the Respondent.

The Petitioner contended that, the questions of law is involved in the matter w.r.t. the operation and effect of Section 129 of Central Goods and Services Tax Act, 2017 (“the CGST Act”) and violation by the Respondent.

Issue:

Whether there involves a question of law in the matter as contended by the Petitioner?

Held:

The Hon’ble Supreme Court of India in Special Leave to Appeal (C) No(s). 21132/2021 dated January 12, 2022 held as under:

  • Noted that, the Hon’ble High Court had meticulously examined and correctly found that no fault or intent to evade tax could have been inferred. Further, the amount of costs as awarded is rather on the lower side, considering the overall conduct of the Petitioner and the harassment faced by the Respondent.
  • Observed that, there was no intent on the part of the Respondent to evade tax and the goods could not be taken to the destination within time, for the reasons beyond the control of the Respondent, including the traffic blockage due to agitation, for which the Petitioner alone is responsible for not providing smooth passage of traffic.
  • Opined that, there is no question of law nor the question of fact involved in the matter and the petition filed by the Respondent has been misconceived.
  • Enhanced and imposed a further sum of INR 59,000/- on the Petitioner the amount toward costs, payable within 4 weeks, over and above the sum of INR 10,000/- already awarded by the Hon’ble Telangana High Court.
  • Clarified that the amount of costs, to be recovered, directly from the person/s responsible for such entirely unnecessary litigation.

Online GST Course by Bimal Jain

Recorded: Certified Advanced GST Course

Course Details: Certificate of Participation will be Provided, Free GST Updates on E-mail, WhatsApp, Telegram for 1 Year, Background Material and PPT will be Provided on the downloadable basis, Total 21 Recorded Sessions (60 Hours), will be available for 120 hours or 60 Days whichever expires earlier.

For Registration:- https://cutt.ly/hxjl5Cu

Recorded: GST Course on Exports, Deemed Exports, SEZ, Imports, Merchandise Exports, Inverted Duty Structure (including Refunds)

Course Details: 6 Online Recorded Sessions of 2.30Hrs each with Background Material (BGM)

For Registration:- https://cutt.ly/pvw7mzl

For more details, Call: +91-11-42427056, E-mail: intern@a2ztaxcorp.com, Web: www.a2ztaxcorp.in

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.