QUESTION

If any person has sold the goods and transported it without an E way bill. Goods reached their destination without any interruption. Can Assessing Officer charge penalty to seller for not preparing E way bill at the time of audit assessment .If yes under which Section of Central GST Act ?

ANSWER

Facts of the case: Goods are supplied without generating E Way Bill.

Law Applicable:
As per Rule 138 of CGST Rules
(1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees'
(i) in relation to a supply; or
(ii) for reasons other than supply; or
(iii) due to inward supply from an unregistered person,
shall, before commencement of such movement, furnish information relating to the said goods as specified in Part A of FORM GST EWB-01 , electronically, on the common portal along with such other information as may be required on the common portal and a unique number will be generated on the said portal ....................

As per section 129 of CGST Act
(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure..................

As per section 122 of CGST Act
(xiv) transports any taxable goods without the cover of documents as may be specified in this behalf

he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded whichever is higher.

Interpretation :E way bill is mandatory for movement of goods of consignment value exceeding fifty thousand rupees as per Rule 138 of CGST Rules.

Consequences: Movement of goods without generating E Way Bill will result in detention and seizure of goods along with vehicle as per Section 129 of CGST Act and penalty will be leviable as per Section 122 i.e. A taxable person who transports any taxable goods without the cover of specified documents would be liable to a penalty of Rs.10,000/- or the tax sought to be evaded whichever is greater.

But the since goods have already reached to the destination this risk is over.

Note: E Way Bill may be desired by the Audit Party as a supporting document for availment of ITC. The Audit Party may issue Show Cause notice to disallow the ITC in the cases where E Way Bill is not received with the material. Although this notice may be dropped in the process of litigation but that will be a wastage of time and energy. So make it practice to not receive goods without E way Bill. (Reply dt.10-07-2020)