Vehicle and Goods were detained alleging carrying expired e-way bill cannot be released by taking the benefit of multimodal shipment. The same was to be released on furnishing Bank Guarantee.

Case Title: Renjilal Damodaran v. Assistant State Tax Officer

Court: High Court of Kerala

Petition Number: WP(C) No. 24819 of 2020 (B)

Date of Judgement: November 13, 2020

Category of Dispute: Detention of goods — Expiry of E-Way Bill

Relevant Sections: Section 129(3) of the CGST Act; Rule 138(10) of the CGST Rules

Facts of the Case

1. The petitioner challenged notices issued under Section 129(3) of the CGST Act, alleging illegal detention of goods and vehicle due to expiry of the e-way bill during transit. [Para 1]
2. The petitioner contended that since the shipment was a “multimodal shipment involving at least one leg by ship,” the longer validity period under Serial No. 3 of Rule 138(10) of CGST Rules should apply. [Para 2]
3. Alternatively, the petitioner argued that as per the third proviso to Rule 138(10), the e-way bill could have been extended within 8 hours after expiry, i.e., by 8 a.m. on 06.11.2020, while the detention happened earlier at 1:30 a.m. on the same day. [Para 2]

Questions in Consideration

1. Whether the petitioner was entitled to claim a longer validity period of the e-way bill under Rule 138(10) due to multimodal shipment. [Para 2]
2. Whether the detention was unjustified considering that the e-way bill could have been extended under the proviso to Rule 138(10). [Para 2]

Observations of the Court

1. The Court clarified that Rule 138(10) classifies cargo into “over dimensional cargo” and “other cargo”, and both can be transported via multimodal means, including ships. Validity varies based on distance, not just mode of transport. The petitioner’s cargo did not qualify for the benefit under Serial No. 3 solely due to involving ship transport. [Para 4]
2. On the point of 8-hour extension, the Court observed that although an extension was legally possible till 8 a.m., the petitioner failed to exercise that option. The goods being detained did not bar such an extension. [Para 5]

Judgement of the Court

1. The Court held that the detention was justified since the e-way bill had expired and the petitioner did not extend its validity within the permissible window. [Para 6]
2. However, the Court allowed the release of goods and vehicle upon furnishing a bank guarantee equal to the demand raised. It directed the respondent to pass final orders after hearing the petitioner. [Para 6]

Between Fine Lines

• E-way bill validity is strictly governed by Rule 138(10) classifications, not merely by the transport mode.
• Expiry of an e-way bill is a valid ground for detention if not extended in time.
• Multimodal shipment does not automatically confer a longer validity unless it meets specific cargo criteria.
• Detention cannot be nullified based on hypothetical possibilities of extension if not acted upon.
• Release of goods can still be secured through a bank guarantee, pending final adjudication.

Summary of Referred Cases