No Case Of Tax Evasion Made Out As Goods Meant For Export Were Taken Back To The Factory For Repairs: Calcutta High Court

The Calcutta High Court has held that no case of tax evasion was made out as goods meant for export were taken back to the factory for repairs.

The bench of Chief Justice T. S. Sivagnanam and Justice Uday Kumar has observed that as per the e-Way Bill, no tax was payable since the goods, which were owned by the appellants, were taken back to their factory at Ranchi for repairs. The goods were detained while in transit at about 8.20 a.m. on September 13, 2019. In terms of Rule 138(10) of the WBGST Rules, an option is given to the assessee to extend the period of the e-Way Bill, and such extension should be done before eight hours and after eight hours of the expiration of its validity. The eight-hour period expired at about 8.10 a.m. on September 13, 2019, and at about 8.20 a.m., the goods were intercepted and detained.

The goods owned by the petitioner were being taken back to the factory for repairs with a valid challan and e-way bill. The e-way bill was valid up to September 12, 2019. The option to extend the e-way bill had expired at about 8.10 a.m. on September 13, 2019, and at about 8.20 a.m., the goods were intercepted and detained.

The court considered the conduct of the assessee and found that it was not with the intention to evade tax. There is no allegation of any evasion of tax; rather, it is not disputed that the goods were being transported under a cover of challan to the factory of the appellants for carrying out repairs.

The court found that it was not a fit case where tax and penalties should have been levied on the petitioner.

Case Title: Usha Martin Limited Vs The Deputy Commissioner Of State Tax

Case No.: MAT/1032/2023

Date: 16.06.2023

Counsel For Petitioner: Ankit Kanodia

Counsel For Respondent: Md. T.M. Siddiqui

Click Here To Read The Order