The Allahabad High Court, under Section 129 of the GST Act, has overruled a penalty imposed by the authority, on the basis that the absence of an E-way bill constitutes a minor technical error and does not give an adequate reason for tax evasion, especially when no other differences are noted.
The petitioner, as per the usual business functions, dispatched five consignments for which five invoices were also issued. These goods were sent from Gwalior to Panna, Madhya Pradesh, passing through Uttar Pradesh. But, in Uttar Pradesh, the e-way bills were not accompanied by the goods which led to the imposition of a penalty under Section 129 (3) of the GST Act. The first appeal filed by the petitioner was rejected.
The petitioner’s counsel referred to a notification from the State of Madhya Pradesh about the exemption of certain goods from requiring a GST e-way bill during transportation. The argument stated that the goods in transit are considered under the exemption as per the said notification and, therefore, does not require an e-way bill for transportation within Madhya Pradesh. Moreover, there were discrepancies were found in the tax invoices and the goods.
On the other hand, the State’s representative invalidated the relevance of the aforementioned notification as the goods were impeded in Uttar Pradesh without an e-way bill.
The Court noted that the seizure of the goods should not have happened because the goods were not unloaded in Uttar Pradesh. It was done intentionally, and these goods were not subject to the e-way bill requirement. When transporting from Gwalior to Panna, vehicles have to cross through Uttar Pradesh for a short distance.
A single-judge bench of Justice Piyush Agrawal ruled that-
“On perusal of the impugned order, it is also found that it is categorically mentioned that the origination as well as the termination of the goods in question was in the State of Madhya Pradesh meaning thereby the authorities are of the view that the goods were not to be unloaded in the State of UP or any intention to avoid tax.
Important: Major GST Issues/Problems Seen Across India Till Now
However, mainly on the grounds of some small technical fault for not carrying the e-way bill, the penalty ought not to have been levied in the absence of any discrepancy in the document accompanying the goods. In view of the above, the impugned orders cannot be sustained in the eyes of law.”
Correspondingly, the directive to impose a tax penalty was overruled and the authority was ordered that the refund amount should be provided to the petitioner.
| Case Title | J.K. Cement Ltd. Vs. State Of U.P. |
| Citation | WRIT TAX No. – 44 of 2023 |
| Date | 28.08.23 |
| Counsel for Petitioner | Shubham Agarwal |
| Counsel for Respondent | Rishi Kumra A.C.S.C. |
| Allahabad High Court | Read Order |
