The two-judge division Bench of the Kerala High Court has said in an order that private vehicles bought in other States, but transported to Kerala, will require no e-Way bill.
Setting aside an earlier order given by a single Bench, the division Bench said cars transported from other States and Union Territories need not produce e-Way bill upon checking by authorities.
The order was passed on an appeal before the division Bench by one Vishnu Mohan, resident of Thiruvananthapuram, who purchased a car from a Puducherry dealer. Upon reaching Kerala, the authorities seized the car as there was no e-Way bill. The customer and the car dealer approached the court, which justified the detention. It may be noted that consignment for an inter-State supply of goods being more than ₹50,000, e-Way bill is mandatorily needed.
The detention was made on three grounds — the consignment is an inter-State supply of goods being more than ₹50,000 which makes e-Way bill mandatory, temporary registration at Puducherry was seen with suspicion and compensation cess was collected at 20 per cent instead of 25 per cent. Since the rules prescribed release only after payment of penalty, a notice was served. Both the buyer and the dealer approached the Court and argued that transportation was done by unregistered person and accordingly, e-Way bill requirement should not arise under K-SGST (Kerala State GST) Rules.
The single judge Bench, in its order, ruled that if the conditions under the Act and Rules are not complied with, Section 129, which talks about confiscation of goods, would apply. The petitioners are entitled to adjudication, but they will have to prove that the goods being transported stand exempted from the rigours of the GST regime, it said. The petitioner appealed against the order and managed to get relief from the larger Bench. The ruling made it clear that when a car is purchased and temporary registration and insurance cover is obtained it becomes a ‘Used Personal Effect’ and thus there is no need for e-Way bill. The Tax Department held that if the buyer had driven the car from Puducherry to Kerala himself, there would be no question of e-Way Bill. However the court said that merely because he got the car delivered by carriage, e-way bill can’t be demanded as the nature of transport doesn’t determine liability, but nature of transaction does.
Expert’s take
Anita Rastogi, Indirect Tax Partner with PwC, termed this as a welcome decision for buyers of car from neighbouring State. “Another aspect dealt with by the court relates to inter or intra-State supply. When a buyer goes to another State and purchases a car it is considered as intra-State supply albeit the buyer brings the car to his own State,” she said.
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