Allahabad HC Grants Relief to Petitioner Who is Facing Penalty for Expired E-Way Bills

Globe Panel Industries India Pvt Ltd Vs State of U.P. And Others (Allahabad High Court)

The Allahabad High Court in a judgment, furnished significant relief to Globe Panel Industries India Pvt Ltd, setting a precedent on the implications of an expired GST E-Way Bill in the transportation of goods. The same decision, arising from the case against the State of U.P. and Others, delves into the intricacies of tax and penalty imposition under the Uttar Pradesh Goods and Services Tax Act, 2017, specifically Section 129(3).

Detailed Analysis

In legal proceedings, the applicant revealed itself trapped because of the expiration of one of its e-way bills, despite the vehicle holding valid e-invoices and matching goods descriptions.

Emphasizing the absence of intention to evade tax the applicant shows because of the diligence by furnishing the proofs of vehicle breakdown and subsequent repairs, supported via a mechanic’s letter and ‘fast tag’ movement tracking. Authorities ignored such proof leading to the levy of a penalty.

The opinion is whether the expiration of an E-Way Bill, in the lack of any intention to evade tax, warrants the levy of a penalty. Quoting precedents in M/s Pepsico India Holdings Limited Lucknow v. Commissioner of Trade Tax and Jain Shudh Vanaspati Limited Ghaziabad and Others v. State of U.P. and Others, the applicant contended against the penalty for technical offences not expressive of tax evasion.

The court, referencing its earlier decisions in M/s Hindustan Herbal Cosmetics v. State of U.P. and Others and M/s Falguni Steels v. State of U.P. and Others, stressed the condition of establishing mens rea, or evade tax intent, for penalty levying under Section 129(3) of the Act. It discovered the authorities’ focus on the expired E-Way Bill, without showing any intent to evade tax or misuse of the bill, to be unjust.

Closure: The Allahabad High Court’s decision to cancel the orders of penalty and obligate a tax refund including a penalty amount to Globe Panel Industries India Pvt Ltd supports the principle that technical violations, absent any intention to evade tax, must not direct to disciplinary actions.

The ruling furnishes relief to the applicant and indeed assists in the subsequent cases, highlighting the requirement to balance the practice in assessing the technical differences in GST compliance. It signifies the pivotal GST jurisprudence moment providing transparency on managing the lapsed e-way bills along with the objective in tax evasion cases.