'GST evasion can't be presumed merely because goods were delivered after expiry of e-way bill'

New Delhi: The Supreme Court has observed that non-extension of e-way bill would not automatically amount to evasion of tax, especially when the non-delivery of goods within the validity period of the e-way bill was due to external factors, like, traffic blockage.

A Bench comprising Justices Dinesh Maheshwari and Hrishikesh Roy dismissed an appeal filed by the Revenue Department assailing the order of the Telangana High Court, which had set aside the order, imposing tax and penalty passed by a Deputy Sales Tax Officer, with cost, Live Law reported.

The respondent (M/s. Satyam Shivam Papers Pvt. Ltd.), a distributor of paper, generated an e-way bill dated January 4, 2020 to make an intra-State supply. The auto trolley engaged to make the delivery on January 4, 2020 (Saturday) could not do so because it got stuck in traffic on account of political rallies opposing CAA and NRC.

The driver of the auto trolley took the goods to his residence to deliver them on the next working day, i.e. January 6, 2020. On its way for delivery on January 6, 2020, he was detained by a Deputy State Tax Officer and a detention notice was served alleging that the validity of the e-way bill had expired and that the consignment was unloaded in a private premise (residence of the driver).

Representation was made by the respondent providing reasons for the delay in delivery. Rule 138 of the CGST Rules, 2018, wherein the validity of e-way bill for more than 20 kms can be extended by an additional day was also cited by the respondent.

The Deputy Sales Tax Officer imposed tax and penalty on the respondent. A writ petition was filed before the Telangana High Court challenging the said order, which was eventually allowed and a cost of Rs. 10,000 was imposed on the Revenue Department.

The Court was satisfied with the examination of facts and the subsequent findings of the High Court.

The Apex Court found the inference drawn by a Deputy Sales Tax Officer that the respondent was evading tax just because its e-way bill had expired a day earlier, without considering the explanation provided in the representations, to be baseless.

It asserted that the respondent had no intention to evade tax and the delay in delivery was due to traffic blockage, which was an event beyond the control of the

respondent.