The GST Appellate Tribunal (GSTAT), Agra has held that the mandatory e-way bill requirement had not come into force for such movement on the date of interception. It upheld the first appellate authority’s decision to set aside the proceedings against the dealer.
The bench of Ajeet Singh (Judicial Member) and Vivek Kumar (Technical Member) while referring to the notifications governing Rule 138, found that the mandatory requirement had not taken effect on the date of interception. It noted that the compulsory e-way bill system was ultimately brought into force nationwide from 1 April 2018. The consignment in this case had been stopped more than four months earlier.
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The dispute began when a mobile squad intercepted a vehicle carrying used iron from Raipur, Chhattisgarh, to Jhansi, Uttar Pradesh. The consignment was valued at ₹5.11 lakh. On checking the vehicle, the officer found a tax invoice and other transport documents, but no e-way bill accompanied the goods.
The officer detained the goods and vehicle under Section 129 of the GST law. An order dated 24 November 2017 imposed tax of ₹91,180 and an equal amount as penalty. The goods were subsequently released after the taxpayer furnished a bank guarantee.
On appeal by the taxpayer, the first appellate authority set aside the proceedings. It observed that the absence of an e-way bill could have been a bona fide or inadvertent error and that the department had made no allegation establishing an intention to evade tax. The State Tax Department then approached GSTAT.
The department argued that Section 68, read with Rule 138, required the person in charge of a consignment exceeding ₹50,000 to produce an e-way bill when asked. It maintained that moving the goods without one justified detention and penalty.
Counsel for the dealer submitted that an e-way bill was generated and given to the officer after interception. More fundamentally, the dealer argued that the central e-way bill provisions had not been brought into mandatory operation for interstate movement by 24 November 2017. The dealer also pointed to the invoice, transport document and GST details accompanying the consignment, and disputed any suggestion of tax evasion.
The Tribunal framed the central question as whether generating and carrying an e-way bill was legally mandatory for interstate movement on 24 November 2017. It also considered whether detention and penalty for failing to produce one could therefore be sustained.
The bench further recorded that officers found no discrepancy in the goods’ quantity, weight or description, and that the vehicle was travelling on its designated route. The department had not alleged that the missing e-way bill reflected an intention to evade tax.
Holding that the detention and penalty could not stand on these facts, GSTAT upheld the first appellate order and dismissed the department’s appeal. The ruling concerns an interception during the initial rollout of GST; its conclusion rests on the e-way bill requirement’s status on 24 November 2017.
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