Allahabad High Court, when the GPS tracking system displays the slow movement of the truck due to mechanical problems in the engine then the penalty under Section 129 of the Goods and Service Tax Act, 2017 cannot have been levied for not extending the period in the e-way bill. The Court held that not extending time for these matters was a technical violation.
During the interception of goods by the applicant, the GST e-way bill lapsed for 4 days. Petitioner’s counsel claimed that as of overheating of the engine of the truck, the driver was driving slowly and intermittently stopping. On the GPS of the truck, reliance was placed to show that it was travelling on the original route.
Respondent’s counsel asked that as there was a breach of rules for the e-way bill, the penalty was accountable to be levied on the applicant.
Laying on its former 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, the Court stated that intent to evade tax is required for levying the penalty under Section 129 of the GST Act. as there was no intent to evade tax, the Court stated that penalty can be sustained in this matter.
“The goods were accompanied by the relevant documents and the explanation of the petitioner with regard to the slow movement of the goods coupled with the GPS tracking system clearly indicates that the truck was moving slowly due to mechanical fault in the engine of the
vehicle. This factual aspect should be considered by the authorities below. The breach committed by the petitioner with respect to not extending time period of the e-way bill is only a technical breach and it cannot be the sole ground for a penalty order being passed under Section 129(3) of Act,” Justice Shekhar B. Saraf said.
Consequently, the writ petition was permitted.
| Case Title | M/S Riadi Steels Llp Vs State Of U.P. And 4 Others |
| Case No. | WRIT TAX No. – 974 of 2022 |
| Date | 21.02.2024 |
| Counsel For Petitioner | Aloke Kumar |
| Counsel For Respondent | C.S.C.,Gaurav Mahajan |
| Allahabad High Court | Read Order |
