The Allahabad High Court in a recent judgement dismissed the writ petition as there was no explanation for the absence of an invoice and e-way bill on Intercepted goods. The court viewed that the petitioner has not been able to rebut the presumption of evasion of taxes, as he has not been able to explain the absence of an invoice and the E-Way Bill.
Sri Pranjal Shukla, counsel appeared on behalf of the petitioner and Sri Ravi Shanker Pandey, Additional Chief Standing Counsel appeared on behalf of the State.
The petitioner, M/S Akhilesh Traders is aggrieved by the order imposing penalty passed by the Assistant Commissioner, Commercial Tax, under Section 129(3) of the Uttar Pradesh Goods and Services Act, 2017 (“the Act”) and the order passed in appeal by Additional Commissioner, Grade-2 (Appeal) 3rd, Commercial Tax.
The goods were intercepted and upon interception, no E-Way Bill, or invoice was present in the vehicle carrying the goods. After the interception, these documents were produced by the assessee.
Sri Pranjal Shukla has relied upon the judgment in M/s Express Logistics India Private Limited v. Union of India and others and argued that when the documents are produced after the interception and before the detention order is passed, no penalty is leviable under Section 129(3) of the Act.
Sri R.S. Pandey has submitted that the judgments relied upon by the counsel for the petitioner related to the period where the detention of goods was before April 2018. He further submitted that in instances of detention that occurred after April 2018, the E-Way Bill is mandatory and is required to be carried along with the goods.
Further argued that neither the E-Way Bill nor even the invoice were accompanying the goods at the time of interception. He, accordingly, submitted that the burden of proof concerning the intention to evade tax shifts from the Department to the assessee.
Contravention to the Rules cannot be treated to be a mere technical or typographical mistake, and accordingly, in such cases, the burden of proof for establishing that there was no mens rea for evasion of taxes shifts to the assessee.
Justice Shekhar B. Saraf concluded that the petitioner has not been able to rebut the presumption of evasion of taxes, as he has not been able to explain the absence of the invoice and the E-Way Bill.
Further held that “Production of these documents after the interception cannot absolve the petitioner from the liability of penalty as the very purpose of imposing penalty is to act as a deterrent to persons who intend to avoid paying taxes owed to the Government. It is clear that if the goods had not been intercepted, the Government would have been out of its pocket for the GST payable on the said goods.” The Court dismissed the writ petition.
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