Expired GST E-Way Bill Pre-Detention, No Intention to Evade Tax: Allahabad HC orders Refund of Tax and Penalty Amount [Read Order]

The Allahabad High Court overturned a penalty imposed for presenting 10-days expired Goods and Services Tax ( GST ) E-way bill during detention. The Court observed that the authorities failed to establish any intent to evade tax in the case.

Justice Shekhar B. Saraf observed that “Indubitably, there is a technical violation that has been committed by the petitioner. However, the authorities have not been able to indicate in any manner that the E-Way Bill had been used repeatedly nor have they made out any case with regard to an intention to evade tax by the petitioner. Accordingly, this Court is of the view that such a technical violation by itself without any intention to evade tax cannot lead to imposition of penalty under Section 129(3) of the Act.”

The petitioner, M/s Globe Panel Industries India Private Ltd, contested the penalty imposed by the Assistant Commissioner, State Tax Department, and the subsequent appellate order passed by the Additional Commissioner.

The petitioner’s counsel argued that while one of the E-Way Bills accompanying the vehicle had expired, all other documentation was in order. The goods in transit matched the description provided in the e-Invoices and E-Way Bills.

The petitioner also provided evidence of the vehicle’s breakdown and the subsequent repair, along with the movement of goods traced through ‘fast tag’ records. The petitioner cited previous judgments to support the argument that penalties cannot be imposed solely due to expired documentation.

However, the Additional Chief Standing Counsel contended that the expired E-Way Bill failed to meet regulatory requirements. Despite considering the petitioner’s arguments, the authorities upheld the penalty, noting the expiration of the E-Way Bill ten days prior to detention and the petitioner’s failure to issue a fresh one.

The High Court stated that “There is no dispute with regard to the consignor and consignee nor any dispute with regard to the description of the goods in the vehicle. In relation to the e-Invoices and the E-Way Bills, the authorities have not been able indicate any intention whatsoever on behalf of the petitioner to evade tax.”

The court referred to previous cases likeM/s Hindustan Herbal Cosmetics v. State of U.P. and Othersemphasising the necessity of mens rea to establish tax evasion and concluded that no such intention was evident in the present case.

While acknowledging a technical violation, the court found insufficient evidence of repeated E-Way Bill misuse or deliberate tax evasion. Consequently, the court ruled that the mere technical violation, without intent to evade tax, cannot warrant penalty under Section 129(3) of the UPGST Act.

The impugned orders were quashed, and the respondents were directed to refund the tax and penalty within four weeks.

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