Kerala High Court refuses relief for ‘glitches’ in E-Way bill

MUMBAI: Taking a strict view of the law, the Kerala High Court on Wednesday refused to provide relief to a trader whose goods were detained by tax authorities due to an incomplete e-Way bill. The petitioner sought relief claiming technical glitches as the reason for the omissions in the e-Way bill. The court directed the trader to furnish a bank guarantee for the tax and penalty amount for the provisional release of the goods. In its ruling, the court also noted that it didn’t want to dilute the statutory provisions of the GST Law and hence won’t intervene.

“It’s another instance where the High Court has refused to intervene and provide relief in case of errors in an e-Way bill. In these circumstances, one of the possible ways currently being explored by most companies is automation of these processes to somewhere avoid possible manual errors,” said Abhishek Jain, Tax Partner, EY. As per the court documents available with ET, Kerala-based Garuda Timber was supplying timber to its customer in Karnataka and prepared a taxable invoice with forest pass.

It also uploaded the e-Way bill on the official GST website. And as per the taxpayer, due to some technical glitches in the GST Network, he could not upload part B of the e-Way bill so the driver took printouts of the incomplete bill. The tax authorities intercepted the vehicle and a detention order was passed citing incomplete e-Way bill. After the goods were confiscated, the detaining officer demanded tax and penalty on the goods. The taxpayer Garuda Timber then challenged the detention and resultant proceedings in Kerala High Court.

“The question whether the substantive benefit can be denied due to mere procedural or technical lapses has been a subject matter of debate before Courts over decades. The court’s decision to allow a release of goods is very pragmatic and would greatly help towards ease of doing business,” said Abhishek A Rastogi, the partner at Khaitan & Co. There have been some recent writ petitions in which taxpayers have challenged e-Way bill penalties. In a recent case in Madhya Pradesh, the high court upheld the penalty levied by the tax department.