Question
ABC supplier of Goods supplies the goods to XYZ limtied as under
    1) send goods to xyz without bill and challan on 6-12-2018 and raised invoice on 15-12-2018
    2) Prepare 3 Invoices of Rs 25000 each but send all material of three bills by one vehicle wihtout e way bill stating that since each bill is less than rs 25000
        therefore there is no violation at its end
    3) send goods in parts on challan and bill was raised after last delivery was made.
Questions arises are as follows:
    a) what are the violation at the end of the ABC Supplier and what are the penal consequences?
    b) Is there any responsibility of XYZ limited with respect to above violations if any. In other words whether XYZ is also liable to penalties for violation a the end of ABC supplier . If yes then under what section and upto what amount XYZ limited is liable to.

Answer

Facts of the case:
ABC supplies goods of Rs 75000/- to XYZ Ltd. without issuing Bill/challan and E Way Bill by one vehicle. Thereafter issues 3 invoices of Rs 25000/- each.

Law applicable:
 SECTION 31 OF CGST ACT
(1) A registered person supplying taxable goods shall, before or at the time of,'

a) removal of goods for supply to the recipient, where the supply involves movement of goods; or

b) delivery of goods or making available thereof to the recipient, in any other case,

issue a tax invoice showing the description, quantity and value of goods, the tax charged thereon and such other particulars as may be prescribed

CGST RULE 138

(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.

SECTION 122 OF CGST ACT

(1) Where a taxable person who

(i) supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply

(xiv) transports any taxable goods without the cover of documents as may be specified in this behalf

he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded or the tax not deducted under section 51 or short deducted or deducted but not paid to the Government or tax not collected under section 52 or short collected or collected but not paid to the Government or input tax credit availed of or passed on or distributed irregularly, or the refund claimed fraudulently, whichever is higher.

Interpretation:
When goods are supplied challan/invoice is required to be issued before dispatch and as the consignment value is more than Rs 50000/- thus E Way bill is also required to be generated before movement of goods irrespective of the fact that you have issued 3 invoices of Rs 25000/- each as the goods are transported in the same vehicle to same consignee. As you have not issued the requisite documents before supply of goods and supplied the goods in contravention of Section 31 and Rule 138, there may a possibility that goods would have been intercepted and detained during transit as per the provisons of Section 129.

For contravention of law you are liable for penalty as per Section 122 which is required to be paid only when it is imposed. However as per law there is no specific penalty for recipient on behalf of supplier, so XYZ is not liable for any penalty.

Conclusion:
In your case you have supplied goods without specified documents in contravention of law, so you are liable for penalty but it is required to be paid only when it is imposed.

(Reply dt.19/06/2019)