E-way bill is valid when goods are delivered beyond time due to circumstances beyond control of the assessee

Case Title: Assistant Commissioner (ST) vs. Satyam Shivam Papers (P.) Ltd.

Court: Supreme Court of India

Petition No.: SLP (C) No(s). 21132 of 2021

Date of Judgement: 12 January 2022

Relevant Section: Section 129, Telangana Goods and Services Tax Act, 2017

Category of Dispute: Detention of goods and penalty under E-Way Bill

Relevant Sections of CGST/SGST Act: Section 129 of TSGST Act

Relevant Rule: Rule 138 of CGST Rules

Facts of the Case

[Para 2, 3, 4]
The petitioner (Revenue) detained a consignment of goods of Satyam Shivam Papers (P.) Ltd., citing expiry of the e-way bill by a day. Despite explanation regarding traffic blockage due to anti-CAA/NRC protests and intervening holidays (Saturday and Sunday), the Assistant Commissioner proceeded to levy tax and penalty of ₹69,000. The detained goods were irregularly stored for 16 days at the residence of a relative of the officer, rather than at a designated warehouse.

Question(s) in Consideration

[Para 1, 7]

• Whether expiry of the e-way bill without extension automatically constitutes tax evasion under Section 129 of the TSGST Act?
• Whether the conduct of the officer in levying penalty and storing goods at a private location was arbitrary and violative of Article 14 of the Constitution?

Observation of Court

[Para 2–6]

• The High Court found no material evidence suggesting tax evasion, noting the officer failed to consider the explanation related to the traffic disruption.
• There was no attempt to sell goods to a third party after expiry of the e-way bill.
• The goods being stored at the relative’s house instead of an official custody point was termed as blatant abuse of power.
• The SC noted the proceedings were based on “baseless” inferences and that the officer acted arbitrarily and illegally.
• The High Court’s reasoning was upheld, and the conduct of the officer was severely deprecated.

Judgement of the Court

[Para 5, 8–12]

• Supreme Court dismissed the SLP filed by the Assistant Commissioner.
• Tax and penalty of ₹69,000 quashed.
• Costs of ₹10,000 awarded by the High Court were enhanced by the Supreme Court by another ₹59,000, totaling ₹69,000.
• The State was given liberty to recover the costs from the erring officer.
• Petition dismissed with direction for compliance and cost payment within four weeks.

Between Fine Lines

The Supreme Court ruled that expiry of the e-way bill alone does not imply tax evasion. The officer’s unilateral action and misuse of authority, including irregular safekeeping of goods, was condemned. The judgment reiterates that explanations for delay must be fairly considered. Arbitrary imposition of penalty without evidence violates Article 14. Misuse of power invites personal cost implications.

Summary of Referred Cases

Takeaway:

“Expiry ≠ Evasion: When Rules Are Weaponised, Justice Intervenes”

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