Home GST SC Lowers Tax Penalty to 50% for Transportation of Goods After Expiry of GST E-Way Bill

SC Lowers Tax Penalty to 50% for Transportation of Goods After Expiry of GST E-Way Bill

SC Lowers Tax Penalty to 50% for Transportation of Goods After Expiry of GST E-Way Bill
SC's Order for Vardan Associates Pvt. Ltd.

Within the case of Vardan Associates Pvt. Ltd. vs. Assistant Commissioner of State Tax Central Part & Ors, the Supreme Court docket of India offered a judgment. The case considerations the transportation of products and the levying of penalties after the expiry of the E-way invoice validity.

The Court docket declined the penalty levied on the appellant to 50% of the preliminary quantity. This weblog revolved round a complete evaluation of the case, emphasizing the pivotal authorized arguments and the implications of the choice of the Supreme Court docket.

Context and Background Data

The petitioner, Vardan Associates Pvt. Ltd., is dedicated to horizontal directional drilling for underground utilities. The case derives from the transportation of a capital items consignment from Auraiya, Uttar Pradesh, to Durgapur, West Bengal. The petitioner generated an E-way invoice for the transportation, however due to unexpected occasions, the consignment was intercepted post-expiry of the E-way invoice validity. The authorities charged a major tax and penalty, directing to the petitioner file a plea.

Authorized Factors and Arguments

  • The delay in transportation was due to the unavailability of a automobile from the transporter, M/s. Hariom Freight Carriers (HFC), in Auraiya, Uttar Pradesh, the petitioner contended.
  • Even after depositing a ten% tax quantity and being able to file the left tax and furnish a financial institution assure for the penalty, the council has refused the discharge of the consignment which the appellant thought of arbitrary.
  • The appellant argued that the consignment, being its property, should not be topic to GST, because it was an “inter-unit switch” of capital items as a substitute of a sale/buy transaction.

Learn Additionally: Most Essential Key Amendments Made within the e-Method Invoice System

Counter Arguments Offered by the Respondents

  • The appellant, being within the enterprise of such transactions, can not declare ignorance of the regulation, the respondent confused.
  • Stressing that the e-way invoice will get lapsed earlier than the consignment crosses the state borders and the petitioner should be conscious to substantiate the well timed transportation.
  • It contended that the penalty was confirmed due to the seriousness of tax issues through which the engagement of the federal government income is there and secures a direct affect on the operation of the federal government.

Determination of the Supreme Court docket

The Supreme Court docket needs to restrict its acknowledgement to the quantum of a penalty and contemplate the appellant’s obligation to observe the regulation to generate a brand new E-way invoice.

Penalty Discount

On the time of upholding the tax quantity, the Court docket lessened the penalty to 50% of the preliminary quantity, i.e., ₹27,00,000/-. The full quantity that’s to be paid by the petitioner was fastened at ₹81,00,000.

The Rationale for the Determination

By way of acknowledging the factual case the court docket has justified the discount, together with the possession of the appellant of the consignment and its utilization for the contractual legal responsibility. The court docket confused the requirement for leniency below such conditions.

Essential Issues for Cautioning the Appellant

The court docket warned the appellant to be alert within the subsequent time, contemplating the distinctive potentialities of the case.

Beneficial: Abstract of Newest GST Modifications Efficient from 1st Oct 2023

Closure: The choice of the Supreme Court docket within the Vardan Associates case furnishes essential data into the complexities of products transportation together with the e-way invoice software. The penalty quantity discount exhibits a steadiness between levying the monetary outcomes and acknowledging the distinctive scenario of the case. The identical resolution can set a precedent for similar instances within the forthcoming time underlining the significance of due diligence in following the tax rules, additionally figuring out real challenges that the companies suffered from.


Please enter your comment!
Please enter your name here