VALIDITY PERIOD OF AN E-WAY BILL

[Mr. M. GOVINDARAJAN]

Validity period

Rule 138 (10)  of the Central Goods and Services Tax Rules, 2017 provides that  an e-way bill or a consolidated e-way bill generated under this rule shall be valid for the period from the relevant date, for the distance, within the country, the goods have to be transported, as below-

• Distance upto 300 kms – The validity period is one day in cases other than Over Dimensional Cargo or multimodal shipment in which at least one leg involves transport by ship;
• For every 100 km. or part thereof thereafter – The validity period is  One additional day in cases other than Over Dimensional Cargo or multimodal shipment in which at least one leg involves transport by ship;
• Up to 20 kms - One day in case of Over Dimensional Cargo or multimodal shipment in which at least one leg involves transport by ship;
• For every 20 km. or part thereof thereafter - One additional day in case of Over Dimensional Cargo or multimodal shipment in which at least one leg involves transport by ship.

Relevant date

The explanation 1 to Rule 138 (10) defines the expression ‘relevant date’ as the date on which the e-way bill has been generated and the period of validity shall be counted from the time at which the e-way bill has been generated and each day shall be counted as the period expiring at midnight of the day immediately following the date of generation of e-way bill. 

Over dimensional cargo

The explanation 2 to Rule 138 (10) defines the expression ‘over dimensional cargo’ as a cargo carried as a single indivisible unit and which exceeds the dimensional limits prescribed in rule 93 of the Central Motor Vehicle Rules, 1989, made under the Motor Vehicles Act, 1988.

Extension of validity period

The Commissioner may, on the recommendations of the Council, by notification, extend the validity period of an e-way bill for certain categories of goods as may be specified therein.

Where, under circumstances of an exceptional nature, including trans-shipment, the goods cannot be transported within the validity period of the e-way bill, the transporter may extend the validity period after updating the details in Part B of FORM GST EWB-01, if required.

The validity of the e-way bill may be extended within eight hours from the time of its expiry.

In ‘Caterpillar India Private Limited v. State Tax Officer, Chennai ‘ – 2019 (5) TMI 932 - MADRAS HIGH COURT the petitioner transported consignments of ‘Off Highway Trucks’ that are zero rated in terms of section 18 of the IGST Act, 2017.  The petitioner, along with the tax invoice, generated an E-way bill on 08.02.2019.  The said consignments required special police permission for their movement between 11 pm and 5 am.   The permission to be obtained from police was delayed by which the validity period of the e-way bill expired.  The consignments were intercepted on 11.02.2019 in the course o movement to the Port for shipping when it was found by the authorities that there was no valid E-way bill accompanying the goods.  The respondents detained the consignments under section 129(1) of the CGST Act, 2017.

A show cause notice was issued specifying the tax and penalty payable on 14.02.2019 for the petitioner and the show cause notice dated 04.02.2019 to the transporter.  The show cause notices proposed tax and equal penalty for the violation detected.   Neither the petitioner nor the transporter did not appear before the proper officer.  Instead of appearing before the proper officer the petitioner and the transporter filed  writ petitions before the High Court, Madras with the prayer for the issuance of a writ of certiorari to quash order passed by the respondent in proceedings No. OR 828/2018-19/RS-V (E).

The petitioner submitted the following before the High Court-

• The transport of the consignment goods had to get the permission of the police.
• There is a delay in getting the permission due to the intervention of weekend.
• The permission was received only on 11.02.2019.
• The transporter generated an e-way bill.
• There was a breakdown o the lorry, due to which he was unable to move the consignment within the period of validity of the document.
• The goods transported were zero rated and hence there is no liability to pay tax.
• Despite the above the petitioner had paid the taxes, as result that the petitioner is entitled to get refund.

The respondents submitted the following before the High Court-

• The confiscation o the goods is perfectly in order as the petitioners have admittedly transported the consignments without valid e-way bills, thus violating of section 130(1)(iv) of the CGST Act.
• The conduct of the petitioner and the transporter is in contravention of the Act and the rules made there under with the intent to evade the tax. 

The High Court observed that both the petitioner and the transporter have moved the consignments without valid e-way bill accompanying the consignment goods, as admitted by them.  Further both of them did not take the necessary precautions to ensure extension o validity of the E-way bill or generation of an alternative valid one but have moved the consignments despite being aware that the documents were stale.

The High Court analyzed the provisions of Rule 138(10) and section 129 of CGST Act.  Section 129(1) of the Act provides for the release of the seized goods in three situations as detailed below-

• where the violating party comes forward, upon detection of the violation upon payment of 100% of the tax;
• where the violating party does not come forward to pay the tax and penalty, upon payment of 100% tax and 50% penalty;
• upon furnishing of security as prescribed in the above two situations.

The Court refrained itself from delving deeper upon in the matter of adjudication.  The quantum o tax is to be assessed by the Adjudicating Authority. Both the parties have paid the tax under protest.  What remains is the penalty.  The High Court also analyzed the provisions relating to penalty.

The High Court directed the petitioners to appear before the Assessing Authority for commencement of proceedings for adjudication.  The question o whether the movement of the consignments sans valid E-way bills constitutes a substantive error or a mere technical breach shall be considered by the Assessing Authority, having regard to the provisions of sections 122, 125 and 126 of the Act as well as the relevant instruction s and circulars issued by the Board.  The Adjudicating Authority shall bear in mind that E-way bills, though stale, had, in fact, accompanied the consignments.  The petitioners have offered explanations in regard to the circumstances that caused the documents to expire and such explanations will be taken into consideration by the officer in determining the quantum of penalty to be levied.

The High Court was inclined to order the immediate release of the goods, the interests of the Department must remain protected.  The High Court held that the goods shall be released upon condition that the petitioner furnishing a Bank guarantee or a sum of ₹ 3,84,30,193/- in favor of the detaining authority prior to the release of the goods.