Court rules that seizing goods over technical errors in e-way bill is invalid, orders release on furnishing security.

Case Name:

M/s. Ganga Industries Vs. Union Of India

Court No. 29

Case: Writ Tax No. 1603 of 2018

Key Takeaways:

- Technical errors in e-way bills or invoices, without any intention to evade tax, cannot be grounds for seizing goods.

- Goods seized on such technical grounds must be released upon furnishing security as per Section 129(1)(a) of the CGST Act.

- The judgment upholds the principle that punitive actions like seizure should be proportional to the alleged offense.

Issue:

Whether the seizure of the petitioner’s goods was valid merely because the date on the tax invoice mentioned in the e-way bill differed from the date on the actual tax invoice.

Facts:

The petitioner’s goods and vehicle were seized by the authorities because the date of the tax invoice mentioned in the e-way bill was different from the date mentioned on the actual tax invoice. The petitioner argued that this was a purely technical error, and there was no allegation or intention of tax evasion.

Arguments:

Petitioner’s argument:

The seizure was on a hyper-technical basis, and the court had previously held in M/s Ramdev Trading Company vs. State of U.P. (2017 UPTC-1200) that where the breach is purely technical with no intention to evade tax, it would not be a valid ground for seizure of goods.

Petitioner also argued that the goods were liable to be released under Section 129(1)(a), (b), and (c) of the Central GST Act, 2017.

Key Legal Precedents:

M/s Ramdev Trading Company and another Vs. State of U.P. and 3 others (2017 UPTC-1200)

Section 129(1)(a), (b), and (c) of the Central Goods and Services Tax Act, 2017

Judgement:

The court accepted the petitioner’s arguments and held that the seizure of goods on the grounds of a technical error in the e-way bill, without any allegation of intention to evade tax, was not a valid ground for seizure. The court directed the release of the goods upon the petitioner furnishing security equivalent to the amount mentioned in Section 129(1)(a) of the Central GST Act, 2017. The petition was disposed of accordingly.

FAQs:

Q1: What is the significance of this judgment?

A1: This judgment establishes that technical errors or discrepancies in e-way bills or invoices, without any intention to evade tax, cannot be used as grounds for seizing goods. It upholds the principle of proportionality in enforcement actions.

Q2: What is the legal basis for the court’s decision?

A2: The court relied on its previous decision in M/s Ramdev Trading Company vs. State of U.P. (2017 UPTC-1200) and the provisions of Section 129(1)(a), (b), and (c) of the Central GST Act, 2017, which deal with the release of seized goods upon furnishing security.

Q3: What does the court’s order mean for the petitioner?

A3: The court’s order means that the petitioner’s goods, which were seized due to the technical error in the e-way bill, must be released by the authorities upon the petitioner furnishing security equivalent to the amount mentioned in Section 129(1)(a) of the Central GST Act, 2017.

Q4: Does this judgment set a precedent for future cases involving technical errors in e-way bills or invoices?

A4: Yes, this judgment can be cited as a precedent in future cases involving technical errors in e-way bills or invoices, where there are no allegations of tax evasion. It establishes that such technical errors should not lead to the harsh action of seizing goods.

The goods and the vehicle of the petitioner have been seized as the date of the tax invoice mentioned in the E-WAY bill was different from the date mentioned on the tax invoice.

The submission is that the seizure is on a hyper technical basis and that this Court in M/s Ramdev Trading Company and another Vs. State of U.P. and 3 others (2017 UPTC-1200) has held that where the breach is purely technical and there is no allegation of intention to evade tax, it would not be a valid ground for the seizure of the goods.

This apart, the goods seized are liable to be released in accordance with the provisions of clause (a)(b) & (c) of Section 129(1) of the Act.

In the present case, since the petitioner is the owner of the goods, we direct for the release of the goods on petitioner furnishing security of the amount equivalent to that mentioned in clause (a) of Section 129(1) of the Act.

The petition is disposed of.

Order Date: 14.12.2018

Hasnain