Requirement of 8 hours validity extension while unloading goods after expiry of GST E- Bill: Karnataka High Court

Requirement of 8 hours validity extension while unloading goods after expiry of GST E- Bill: Karnataka High Court

The Karnataka High Court (HC) said that the validity of unloading goods post expiry of Electronic-Way (E-Way) Bill may be extended to 8 hours before reaching the goods to the destination

Order dated 29 November 2020

M/s Hemanth Motors (the petitioner), is a dealer in TVS motor vehicles and an assessee registered under the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act). Petitioner bought two-wheeler vehicles from a wholesaler under the tax invoice dated 31 December 2018. The motor vehicles were dispatched from Hosur, Tamil Nadu, and were to be delivered at Doddaballapura Road, Yelahanka, in Bengaluru after generating the corresponding e-way bills. The said bills were valid from 31 December 2018 (10:37pm) to 1 January 2019.

The vigilance commercial tax officer (Respondent No. 3) visited the petitioner's premises. An order for physical verification culminated into the notice dated 7 January 2019 as per the provisions of Section 129(3) of the CGST Act and the other relevant provisions. A demand notice dated 8 January 2019 was also served to the petitioner.

Petitioner filed an appeal against the said orders made under Section 107(11) of the KGST Act that was dismissed on 28 November 2019. Petitioner moved to the HC through a Writ Petition filed under Article 226 of the Constitution of India against the State of Karnataka, the Commissioner of Commercial Taxes, Vigilance Commercial Tax Officer, Joint Commissioner of Goods and Service Tax (Respondent No. 4),and others (collectively referred to as respondents). It prayed to declare Section 129 of the KGST/ CGST Act, 2017 as null and void and ultra vires to the Constitution.

It was further requested by the petitioner that the said provision should be struck down for being illegal, violative of Article(s)14,19(1)(g) of the Constitution. A request was also made for issuance of a writ of certiorari quashing the impugned notice dated 28 November 2019 passed by the fourth respondent,7 January 2019 and order dated 8 January 2019 passed by Respondent No.3.

The respondents did not dispute the said assertions made by the petitioner and contended that the e-way bills had to be valid even at the time of the inspection quoting the reason that the vehicles were being unloaded from the conveyance.

The said matter was listed before the single-judge bench of Justice Shyam Prasad. Justice held that the respondents should have considered it in the merits of the proceedings against the petitioners in the light of the provisions of Rule 138(10) of the CGST Rules, 2017. The said rules clearly prescribed an extension to the validity period of an e-way bill for 8 hours after expiry.

It concluded that the respondents had failed to consider the petitioner's case in the light of the provisions of Rule 138(10) of the CGST Rules, 2017. Hence, the orders passed by the respondents were improper and untenable order. The writ petition was allowed and the orders passed by the respondents were quashed.