Madhya Pradesh High Court
M/S Vishalfab (India) Pvt. Ltd Unit 2 vs The State Of Madhya Pradesh on 9 July, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2025:MPHC-IND:18103
-1- WP-27287-2022
IN THE HIGH COURT OF MADHYA PRADESH
AT I N D O R E
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
th
ON THE 9 OF JULY, 2025
WRIT PETITION No. 27287 of 2022
M/S VISHALFAB (INDIA) PVT. LTD UNIT 2
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Alok Barthwal - Advocate for the petitioner.
Shri Anand Soni - Additional Advocate General for the respondent/
State.
ORDER
The present petition has been filed by the petitioner challenging the order dated 06.06.2022 passed in Case No. 142/2018 GST by the Appellate Authority and Joint Commissioner, State Tax Headquarters, Indore whereby the order passed by the adjudicating authority has been upheld confirming the imposition of IGST and penalty of Rs. 2,99,208/- upon the petitioner.
2. Brief facts of the case are as under :
2.1 The petitioner is engaged in the business of manufacturing Electrical and Electronic components, Sub-Assemblies, parts and accessories of the motor vehicle and copper strips from the manufacturing plant situated at 13-14, Sector E, Sanwer Road, Industrial Area, Indore falling under various Signature Not Verified Signed by: SREEVIDYA Signing time: 15-Jul-25 6:02:42 PM NEUTRAL CITATION NO. 2025:MPHC-IND:18103
-2- WP-27287-2022 chapters of the GST Tariff Act, 2017. The petitioner imported machinery from China in 2016 for use in the production of goods by M/s Shanghai Eos International Trading Co., Ltd., China. Petitioner submitted a bill of entry No. 7469679 dated 02.08.2018 at JNCH, Nhava Sheva, Tal Uran, District Raigad (Maharashtra) and made payment of IGST of Rs. 1,48,524/- vide challan dated 02.08.2018 for clearance of the goods. The petitioner hired Khandelwal Roadlines Service for the transportation of the said goods from JNCH, Nhava Sheva, Raigad (customs port), to the petitioner's premises in Indore. The petitioner disclosed the lorry receipt number, bill of entry, etc. Petitioner generated an E-Way bill dated 09.08.2018 mentioning details of the transaction. The said truck No. MP09-GG-6080 was intercepted by the Assistant Commissioner, State Tax, Anti Evasion Bureau on 11.08.2018. After checking all the documents, no irregularity was found but an objection was raised about the non-filing of Part-B of E-Way bill i.e. vehicle number did not appear in the E-Way bill. Hence, the goods were seized under Section 129(1) of the Goods and Service Tax, 2017 (hereinafter referred to as the 'GST Act').
Petitioner was served with notice under Section 129(3) of the GST Act proposing to impose IGST at the rate of 18% on seized goods value and an equal amount of penalty i.e. a total amount of Rs. 2,99,208/- upon the petitioner. The petitioner submitted a Bank Guarantee of Rs. 2,99,208/- dated 17.08.2018 for releasing the vehicle along with goods.
2.2 The Assistant Commissioner, Sales Tax adjudicated the show cause notice by passing an order dated 18.08.2018 affirming the tax demand of Rs. 1,49,604/- and also imposed a penalty of an equal amount of Rs. 1,49,604/- on the ground that the E-Way bill did not contain the vehicle number, hence the same cannot be a valid E-Way bill under Section 129. Being aggrieved by the aforesaid order, the petitioner preferred an appeal Signature Not Verified Signed by: SREEVIDYA Signing time: 15-Jul-25 6:02:42 PM NEUTRAL CITATION NO. 2025:MPHC-IND:18103
-3- WP-27287-2022 before the appellate authority by pre-depositing an amount of Rs. 14,961/-. The appellate authority vide order dated 06.06.2022 dismissed the appeal No. 142/2018 and upheld the order passed by the adjudicating authority. Hence, the present petition before this Court.
Submissions of the counsel for the petitioner
3. Learned counsel for the petitioner submitted that the petitioner had already paid the GST in advance. In E-Way Part A, the petitioner has disclosed all the particulars about the import and transportation of the goods. It was the duty of the transporter to fill the Part B of the E-Way bill for which the petitioner has wrongly been penalised. The adjudicating authority and appellate authority have wrongly imposed the penalty. Since the learned Tribunal has not been constituted, therefore, the petitioner has approached this Court by way writ petition.
4. Learned counsel for the petitioner submits that in similar circumstances where the E-Way bill was not found with the transporter but later on submitted before the order passed by the adjudicating authority, the appellate authority has set aside the order of penalty. In support of his contention, learned counsel has placed reliance on the judgment passed by the Apex Court in case of Assistant Commissioner (ST) vs. Satyam Shivam Papers Pvt. Ltd., 2022 (57) GSTL 97 (SC) wherein the demand and penalty imposed due to expiry of the E-Way a day prior have been set aside by observing that the assessee had no intention to evade the tax. He has also placed reliance on the order passed by the Coordinate Bench of this Court at Jabalpur in the case of Technosteel Infraprojects Pvt. Ltd. vs. State of Madhya Pradesh, 2022 (61) GSTL 576 (MP) wherein there was a bonafide mistake in the address mentioned in the E-Way bill, therefore, the High Court Signature Not Verified Signed by: SREEVIDYA Signing time: 15-Jul-25 6:02:42 PM NEUTRAL CITATION NO. 2025:MPHC-IND:18103
-4- WP-27287-2022 has quashed the order passed under Section 129 of GST Act. In another case, Robbins Tunnelling & Trenchless Technology (India) Pvt. Ltd. vs. State of M.P., 2021 (48) GSTL 337 (MP), the Division Bench of this Court has set aside order passed by the respondent as there was no major lapse in the E-Way bill in respect of consignment of the goods. Hence, it is prayed that the petition be allowed and the impugned order be set aside.
Submission of counsel for the respondent
5. Shri Anand Soni, learned Addl. The Advocate General for the respondent/State submitted that as per the provisions of Rule 138 of the M.P.Goods and Service Tax Rules, 2017 the generation of E-Way bills is a mandatory condition for movement of the goods exceeding Rs. 50,000/- in value. The E-Way bill comprises two parts: Part A and Part B. While Part A contains the details of the goods and the consignor/consignee, Part B contains the critical information about the vehicle transporting the goods, particularly the vehicle number. In the absence of these crucial details, the E-Way bill is incomplete and invalid. In the present case, the petitioner has generated Part A of the E-Way but failed to generate Part B containing the vehicle details. Hence, the order under Section 129 of the GST Act has rightly been passed.
6. Shri Soni, Addl. A.G. submits that this issue came up for consideration before the Division Bench of this Court in the case of M/s Gati Kintetsu Express Pvt. Ltd. vs. Commissioner, Commercial Tax of M.P. & Ors. in W.P.No. 12399 of 2018 dated 05.07.2018 wherein it has been held that as per rules, it is mandatory that Part B must be updated in the E-Way bill entry and in case Part B is not uploaded, the E-Way is not genuine/valid. This is not a minor mistake and cannot be treated as a technical error. Hence, the petition is liable to be dismissed.
Signature Not Verified Signed by: SREEVIDYA Signing time: 15-Jul-25 6:02:42 PMNEUTRAL CITATION NO. 2025:MPHC-IND:18103
-5- WP-27287-2022 Appreciations and Conclusion
7. Section 129 of the Madhya Pradesh Goods and Service Tax Act, 2017 is reproduced below :
"129. (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, shall be released,-
(a) on payment of the applicable tax and penalty equal to one hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty;
(b) on payment of the applicable tax and penalty equal to fifty per cent. of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty;
(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed:
Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.
(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances. (3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c).
(4) No tax, interest or penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard.
(5) On payment of the amount referred to in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded.Signature Not Verified Signed by: SREEVIDYA Signing time: 15-Jul-25 6:02:42 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:18103
-6- WP-27287-2022 (6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub- section (1) within seven days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130:
Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with the passage of time, the said period of seven days may be reduced by the proper officer."
8. As per sub-section (1), where any person transports any good or store any good while in transit in contravention of this Act and Rules shall be liable to be detained or seized.
9. Section 126 of the Act provides for the general disciplines relating to the penalty for minor breaches of tax regulations. No officer under this Act shall impose any penalty because such a breach is liable to be considered as minor breach. For minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence. Penalty imposed under this Act shall depend on the facts and circumstances of each case and shall be commensurate with the degree and severity of the breach. Therefore, the judgment which has been relied upon by the petitioner where the penalty has been quashed because the High Court found that the penalty was minor in nature is not applicable in the present case. In the case at hand, it is to be examined whether the breach is liable to be considered as a minor breach.
10. As per the explanation (b) of Section 126(1), an omission or mistake in documentation shall be considered to be easily rectifiable if the same is an error apparent on the face of the record.
11. By way of amendment dated 07.03.2018, Rule 138 was Signature Not Verified Signed by: SREEVIDYA Signing time: 15-Jul-25 6:02:42 PM NEUTRAL CITATION NO. 2025:MPHC-IND:18103
-7- WP-27287-2022 substituted in the M.P. Goods and Service Tax Rules, 2017 which is reproduced below :
"138. Information to be furnished prior to commencement of the movement of goods and generation of e-way bill.-(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 :
Provided that the transporter, on an authorization received from the registered person, may furnish information 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 :
Provided further that where the goods to be transported are supplied through an e-commerce operator or a courier agency, on an authorization received from the consignor, the information in Part A of FORM GST EWB-01 may be furnished by such e-commerce operator or courier agency and a unique number will be generated on the said portal:
Provided also that where goods are sent by a principal located in one State or Union territory to a job worker located in any other State or Union territory, the e-way bill shall be generated either by the principal or the job worker, if registered, irrespective of the value of the consignment:
Provided also that where handicraft goods are transported from one State or Union territory to another State or Union territory by a person who has been exempted from the requirement of obtaining registration under clauses (i) and (ii) of section 24, the e-way bill shall be generated by the said person irrespective of the value of the consignment.
Explanation 1- For the purposes of this rule, the expression "handicraft goods" has the meaning as assigned to it in notification (Mo. KA.NI.-2-1414/XI-9(15)/17-U.P.Act-1-2017-Order-(48)-2017 dated 27-09-2017 as amended from time to time. Explanation 2.- For the purposes of this rule, the consignment value of goods shall be the value, determined in accordance with the provisions of section 15, declared in an invoice, a bill of supply or a Signature Not Verified Signed by: SREEVIDYA Signing time: 15-Jul-25 6:02:42 PM NEUTRAL CITATION NO. 2025:MPHC-IND:18103
-8- WP-27287-2022 delivery challan, as the case may be, issued in respect of the said consignment and also includes the central tax, State or Union territory tax, integrated tax and cess charged, if any, in the document and shall exclude the value of exempt supply of goods where the invoice is issued in respect of both exempt and taxable supply of goods.
(2) Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or a public conveyance, by road, the said person shall generate the e-way bill in FORM GST EWB-01 electronically on the common portal after furnishing information in Part B of FORM GST EWB-01.
12. As per Rule 138(1), every registered person who causes the movement of goods of consignment value exceeding Rs. 50,000/- 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. The transporter on an authorisation, registered person furnishes such information. As per sub-Rule (2) of Rule 138, where the goods are transported by a registered person as a consignor whether in his own conveyance or a hired one or a public conveyance by road, the said person shall generate the e-way bill in FORM GST WEB-01 electronically on the common portal after furnishing information in Part B of FORM GST EWB-
01. Therefore, the petitioner is wrong in contending that Part B of the FORM is liable to be filled by the transporter. The first duty is cast upon the registered person to generate the E-Way bill Part B.
13. As per sub-Rule (3) of Section 138 where the goods are handed over to a transporter for transportation by road, the registered person shall furnish the information relating to the transporter on the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of information furnished by the registered person in Part A of the FORM GST EWB-01.
Signature Not Verified Signed by: SREEVIDYA Signing time: 15-Jul-25 6:02:42 PMNEUTRAL CITATION NO. 2025:MPHC-IND:18103
-9- WP-27287-2022
14. It is not in dispute that the petitioner deposited the IGST in advance, furnished details in Part A and generated the E-Way bill on 09.08.2018 before the transportation. The vehicle was intercepted on 11.08.2018 by the Assistant Commissioner, State Tax, Anti Evasion Bureau, Indore and till then Part B of the E-Way bill was not generated and uploaded on the portal. For two days neither the petitioner nor the transporter generated or uploaded the Part B of the E-Way bill. Rule 138(5) of the MP GST Rules, 2017 mandates that the goods are transferred from one conveyance to another, the consignor or recipient, who has provided information in Part A of the FORM GST WEB-01, or the transporter shall before such transfer and further movement of goods, update the details of conveyance in the E-Way bill on the common portal in Part B of FORM GST EWB-01. According to the respondents, it is a gross negligence as well as malafide on the part of the petitioner as an un-updated E-Way bill can be used for further transportation.
15. Petitioner has filed a copy of E-Way bill Part A Slip which was generated on 09.08.2018 which is reproduced for ready reference :
Signature Not Verified Signed by: SREEVIDYA Signing time: 15-Jul-25 6:02:42 PMNEUTRAL CITATION NO. 2025:MPHC-IND:18103
-10- WP-27287-2022
16. It has been found that the above Part A is 'Not Valid for Movement as Part B is not entered (800 km)'. For the movement of 800 km by road of goods valued at Rs. 7,62,247/-, it was mandatory for the petitioner to generate Part B of the E-Way bill before the movement of the goods to ensure that the imported goods reached the correct destination disclosed by the dealer. The goods started their movement on 09.08.2018 and were intercepted on 11.08.2018 and in these three days, the petitioner did not generate or upload Part B of the E-Way bill. Therefore, the same cannot be treated as a minor mistake.
17. In view of the aforesaid facts & circumstances and the provisions of law, we are of the considered opinion that the impugned order dated 06.06.2022 passed by the respondent authority is just and proper and does not warrant any interference by this Court.
The petition stands dismissed accordingly.
(VIVEK RUSIA) (BINOD KUMAR DWIVEDI)
JUDGE JUDGE
vidya
Signature Not Verified
Signed by: SREEVIDYA
Signing time: 15-Jul-25
6:02:42 PM