In CWP-23501/2021 -P&H HC- Punjab and Haryana High Court grants relief to Novateur Electrical and Digital Systems Pvt. Ltd.; Allows release of goods seized for technical error in e-way bill
Justice Ritu Bahri & Justice Alok Jain [11-09-2023]

Read Order: M/s Novateur Electrical and Digital Systems Pvt. Ltd v. Addl. Commissioner of State Tax Appeals cum Appellate

Chahat Varma

New Delhi, September 29, 2023: In a relief for M/s Novateur Electrical and Digital Systems Pvt. Ltd. (petitioner), the Punjab and Haryana High Court has allowed the release of their goods, that were seized by the Haryana state GST authorities for a technical error in the E-way bill.

In this case, the petitioner had sold electrical goods with a total value of Rs. 33,82,363 to M/s. Setia Electricals India Pvt. Ltd., Gurugram, and goods worth Rs. 3,38,037 to Rameshwar Traders, Gurugram. However, on 26.10.2018, while the goods were in transit from Delhi to Gurugram, the truck carrying the goods was intercepted by the state tax enforcement road-side checking squad in Gurugram, along with the AC mobile squad of Haryana state GST. They seized the goods on the grounds that Part B of the four E-Way Bills accompanying the goods were not properly completed. Following this interception, the Assistant Excise and Taxation Officer issued a penalty order. This was done invoking Section 129(1)(a) of the Haryana Goods and Services Tax Act (HGST Act), read with Section 20 of the Integrated Goods and Services Tax Act (IGST Act). The petitioner, dissatisfied with the aforementioned order, filed an appeal with the Additional Commissioner of State Tax (Appeals)-cum-Appellate Authority. However, this appeal was dismissed on 09.01.2020.

The petitioner's counsel pointed out a circular dated 14.09.2018. According to this circular, it was stated that if there were technical errors in the documents accompanying the goods during their transportation, the authorities should not resort to the provisions of Section 129 of the HGST Act. Instead, the circular suggested that the goods could be released upon payment of a nominal penalty under Section 125 of the GST Act.

Conversely, the Department contended that this case represented a significant breach of Section 68 of the HGST Act, read with Rule 138-A of the HGST Rules.

In the context of the present case, the division bench of Justice Ritu Bahri and Justice Alok Jain observed that, during the vehicle search of the petitioner, Part B of the documents was initially left unfilled. However, it was subsequently completed by the driver in the presence of the officer. As a result, there appeared to be no malicious or fraudulent intent on the part of the petitioner. Consequently, the bench determined that proceedings under Section 129 of the HGST should not have been initiated, in accordance with the circular dated 14.09.2018.

The bench stated that the primary aim of the circular dated 14.09.2018 was to address situations outlined in the circular, which were essentially procedural in nature and did not involve any deliberate intent to mislead the transportation of goods. It was noted that aside from the omission of the vehicle number in Part B of the documents, all other required documents had been presented by the driver of the vehicle.

Considering the circumstances, the present petition was allowed, and the order dated 09.01.2020 was set aside. Nevertheless, a penalty of Rs. 500 was imposed on the petitioner for not mentioning the vehicle number.