The Allahabad High Court has ruled that the e-way bill will not be mandatory for intra-city movement of goods, upholding an order by the appellate authority. Though this ruling is binding on the petitioner and respondent only, it can be referred to in similar matters in various courts
The e-way bill is a document that a person in charge of the conveyance of a consignment of goods valued at more than Rs 50,000 has to carry, as prescribed in the GST Act.
Technically speaking, an e-way bill would be required for transportation of goods, value at Rs 50,000 or more, even within one kilometer. However, the states are free to amend the limit or provide exemptions for inter-state movement of goods or movement within the city. Gujarat has exempted intra-city movement of goods, irrespective of value.
In the current case, Principal Commissioner CGST & Central Excise, Lucknow, challenged the appellate order passed by the Additional Commissioner (Appeals), Customs, GST and Central Excise, in the matter of Lucknow-based Bushrah Export House. The firm sought a CGST refund of over Rs 1.84 crore in February 2020. Initially, provisional refund was allowed, but when claims of the respondent were scrutinised, the tax department found that the refund granted was erroneous. Accordingly, show cause notice was issued to the firm, not just on the issue of refund, but also on the issue of input tax credit.
On further examination, the Deputy Commissioner felt that the suppliers to the firm had not supplied the goods in the absence of an e-way bill. It passed an order rejecting claim of ITC and remaining refund amount, besides recovery and sanctioned amount and levying penalty.
The firm filed an appeal before the Additional Commissioner (Appeals) CGST, Lucknow, stating that the inputs received by the respondents were sent from Surat to its warehouse in the same city, where they were processed and, subsequently, the goods were exported through ICD Kanpur.
They relied on the notification issued by the Gujarat Commercial Tax Department, providing that an e-way bill was not required for intra-city movement of goods, irrespective of the value. The appeal was accepted and order staying refund and levy of penalty was set aside. This took the Tax Department to the High Court.
Here, there were two allegations – suppliers provided the goods to the firm without an e-way bill and the firm sent the goods from Surat to Kanpur with an e-way bill. The Court observed that in the present case, the show cause notice is confined to the allegations against the respondents (the firm) receiving the supplies of goods without the e-way bills, which fact has been dealt with by the appellate authority after perusing the invoices that “the goods were supplied to the respondents from Surat to Surat and thus, the notification dated September 19, 2018 was clearly in favour of the respondents.”
It also noted that no allegation was levelled regarding transfer of goods from Surat to Kanpur with the e-way bill. Considering these, the Court rejected the appeal by the GST Department.