Question

One my friend cleared goods preparing of invoice with 18% GST (9% each) and preparing of E-way Bill Part-A. Part-B of E-way bill was to be filled up by Transporter, but without filing up/uploading Part-B, they started journey. The truck was intercepted by State GST Officials and they had detained the truck for non-filing up part-B of E-way Bill. After due process i.e. charging of 100% penalty of total GST from supplier of the goods, truck was released passing of an OIO.

Can he file appeal to get penalty amount back as there was no fault on their part but of transporter? To whom appeal be made?
 

Answer

Facts of the case:
Goods were transported without updating and uploading the PART-B of eway bill. Penalty was levied and paid in full. And now the taxable person wants to file an appeal on the grounds that violation was committed on the part of the transporter and the taxable person begs mercy with a claim that penalty shall be refunded in full.

Law Applicable:
(i) Sub Rule(2) of Rule 138 of CGST says that;
" Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or a public conveyance, by road, the said person shall generate the e-way bill in FORM GST EWB-01 electronically on the common portal after furnishing information in Part B of FORM GST EWB-01."

(ii) Sub Rule(3) of Rule 138 of CGST says that;
"Where the e-way bill is not generated under sub-rule (2) and the goods are handed over to a transporter for transportation by road, the registered person shall furnish the information relating to the transporter on the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of the information furnished by the registered person in Part A of FORM GST EWB-01"


(iii) Sub clause (xiv) of section 122 states that;
"Where a taxable person who transports any taxable goods without the cover of documents as may be specified in this behalf shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded whichever is higher"

Interpretation:
(i) By the combined reading of rule 138(2) and 138(3) it is evident that law bestows the primary responsibility of filling of eway bill Part-B in the hands of consignor/consignee. Updating the PartB by transporter is an additional facility provided by law in cases where the party of the first part being consignor/consignee is not able to fill PartB.

(ii) Because of this optional facility is shall not be construed that only transporter is responsible for filling the PartB. Consignor/consignee causing the movement must ensure that eway Bill is properly filled and updated.

(iii) In case of failure of the same penalty is attracted under section 122(xiv) of the amount equal to tax evaded or 10,000 whichever is higher.

Conclusion:
Filling an appeal on this ground would not be upheld however if there are any other valid grounds of litigation is this case then the appeal can be filled. (Reply dt.27/03/2019)