E-way bill – Every transaction has to be looked into independently for determining ceiling of Rs. 50,0000

• Every transaction has to be looked into independently for the purpose of determining ceiling of Rs. 50,000 for requirement of generation of e-way bill: Allahabad High Court.
• The brief facts of the case were that the Petitioner assesses is engaged in the business of selling Sweet Supari and Betel Nut Product. The Petitioner, in its normal course of business sold 90 bags of betel nut product in following manner:

1. 87 bags to one registered dealer
2. 3 bags to another registered dealer using common transport, in such manner that the value of second transaction/ consignment was less than Rs. 50,000 and accordingly in the opinion of the Petitioner, did not require e-way bill. With respect to supply of 87 bags of betel product, however, the documentation was complete and e-way bill was also generated. Impugned order

• The vehicle was intercepted, and on examination, it was found that while 87 bags of goods were accompanied with valid invoice, e-way bill and all supporting documents, the three bags of betel nut product were not accompanied with tax invoice. Resultantly, the Department formed a view that complete 90 bags are liable to be detained and subsequently were seized.
• The Petitioner prayed for release of goods without security. Following submissions were made: In respect of 87 bags of betel product

1. supply was legal and within four corners of statute,
2. E-way bill was duly generated in respect of this supply, and the supply was accompanied with all necessary documents and there was no contravention of any provision of Act or rule.
3. There was no need to seize the said goods.

• In respect of three bags of betel product

1. The consignment value was less than Rs. 50,000 and hence no need to generate e-way bill
2. Further, it was argued that the tax invoice was duly issued in respect of the three bags of betel product and was also handed over to the transporter, but by mistake, he left it behind
3. The Tax invoice was subsequently submitted as part of reply to show cause notice to the authorities. It was further argued that if any discrepancy can be attributed, it should be with regard to three bags only inasmuch as documentation was complete in respect of 87 bags.

• the Counsel for the Respondent submitted as follows:

1. In the case in hand, only one e-way bill was issued with respect to 87 bags.
2. No e-way bill was issued with respect to three bags, and the tax invoice was submitted only in reply to SCN, which is contravention of the provisions of Act.
3. If the consignment of various dealers were going and there were any discrepancy with regard to any of the consignment, the consignment as a whole has to be seized and therefore the seizure order is legal.

• The Hon’ble Court, upon hearing the parties and on perusal of the record, delivered the following ruling:

1.  It is undisputed that tax invoice was issued but could not be produced at the time of detention, but was submitted in reply to SCN, but before the order of seizure was passed.
2. No discrepancy was found after filing of reply to SCN along with documents for supply of three bags.
3. Hon’ble Court held that if the dealer has submitted the tax invoice along with the reply to SCN, then no adverse inference can be drawn.
4. In case documents are submitted along with reply to SCN, and still those documents are not accepted by the authorities, then issuance of SCN will become redundant. It is settled principle of law that quasi judicial authority while exercising any of its statutory powers have act fairly with open mind in the adjudication proceedings before it. The person who is subjected to show cause notice must get an impression that the reply to SCN will not be an empty formality.
5. Once the value of consignment was less than Rs. 50,000, then there was no need for generation of e-way bill.
6. The submission on behalf of the Respondent that where a consignment has value of less than Rs. 50,000 and is accompanied with other consignments also, then the entire consignment is required to be covered by e-way bill is not acceptable and is contrary to the provisions of Rule 138 of the CGST Rules. Accepting the interpretation of the Respondent will make the ceiling prescribed in Rule 138 as redundant.
7. Every transaction has to be looked at independently. In case, discrepancies were found in one transaction pertaining to goods, then goods pertaining to another separate transaction could not be detained/ seized. It would have been a different thing had the sales been made to one registered dealer.