In CWP-2490 of 2019 -P&H HC- Punjab & Haryana High Court finds M/s Bright Road Logistics guilty of attempting to evade tax by reusing e-way bills, tax invoices
Justice G.S. Sandhawalia & Justice Harpreet Kaur Jeewan [09-08-2023]

Read Order: M/s Bright Road Logistics V. State of Haryana and others

Chahat Varma

New Delhi, August 18, 2023: The Punjab and Haryana High Court recently ruled against M/s Bright Road Logistics (appellant), stating that they had attempted to reuse e-way bills and tax invoices, implying an intention to evade tax payment. The Court deemed the orders issued by the Proper Officer under Sections 129 and 130 of the Central Goods and Services Tax Act (CGST Act), along with provisions from the Integrated Goods and Services Tax Act (IGST Act), to be legal and valid. The appellate authority's decision to uphold these orders was upheld by the Court.

The brief facts of the case were that the appellant, engaged in road transportation of goods, had their consignment of mixed scrap (copper, aluminium, and bead scrap) intercepted and detained by the Assistant Excise & Taxation Officer (Enforcement) in Gurugram. The seizure occurred under Section 68(3) of the CGST Act, 2017, the HGST Act, and Section 20 of the IGST Act. This order led to the confiscation of the truck and goods, with their release contingent on a payment of Rs. 35,36,000, comprising Rs. 9,36,000 in taxes and a penalty of Rs. 26,00,000 under Section 129(1)(b) of the CGST Act, 2017. The appellate authority found that the case involved the intentional reuse of documents with a malicious intent to evade taxes legitimately owed to the government. The counsel representing the petitioner argued that the appellate authority's affirmation of the order for tax demand and penalty imposition by the Proper Officer was erroneous.

Taking into consideration the provisions under Sections 20 and 4 of the IGST Act, as well as an order dated December 7, 2017, issued by the Excise & Taxation Commissioner of Haryana assigning functions to the Proper Officer under the HGST Act, the bench of Justice G.S. Sandhawalia and Justice Harpreet Kaur Jeewan held that the Assistant Excise and Taxation Officer of State Tax possessed the competence and authorization to exercise the powers prescribed in Section 129 and 130 of the IGST Act.

Furthermore, the bench observed that Rule 138 of the CGST Act, outlines that any registered individual causing the movement of goods with a consignment value exceeding Rs. 50,000 must generate an e-way bill before the commencement of the movement. The bench noted that in the present case, e-way bills were not generated for any of the transactions in question, even though the alleged value of the supplies exceeded Rs. 50,000.

The bench further observed that the documents presented by the petitioner to support their claim that the scrap was unloaded in Bangalore and remained there between 26.04.2018 and 14.05.2018, due to the use of the vehicle for transporting other goods, were not considered authentic. Moreover, no e-way bill was provided to demonstrate the movement of the vehicle. The bench noted that the Proper Officer was justified in disregarding these documents. The fact that the quantity of scrap mentioned in the documents produced by the driver differed from the quantity observed during the vehicle interception also raised doubts.

The bench also highlighted that according to Sub-section 6 of Section 129 of the CGST Act, if a person transporting goods or the owner of the goods fails to pay the required tax and penalty within 14 days of the detention and seizure of the vehicle, it leads to the initiation of proceedings under Section 130 of the CGST Act, 2017. Since the payment was not made within the stipulated time in this case, the bench held that the Proper Officer was well within their authority to begin proceedings under Section 130 of the Act.

Ultimately, the bench concluded that the writ petition lacked merit and thus dismissed the case.