The Allahabad High Court dismissed the writ petition filed by M/s Akhilesh Traders and upheld the penalty orders imposed under Section 129(3) of the Goods and Services Act, 2017 ( GST Act ).
The writ petition challenged the penalty order dated August 8, 2018, issued by the Assistant Commissioner, Commercial Tax, Mobile Squad Unit-4, Prayagraj, and the subsequent order dated August 20, 2019, passed in appeal by the Additional Commissioner, Grade-2 (Appeal) 3rd, Commercial Tax, Prayagraj.
The goods of the petitioner were intercepted during transport. The authorities found no E-Way bill or invoice for the goods. These documents were only produced later. Subsequently, a penalty was imposed on the petitioner under Section 129(3) of the UPGST Act.
Pranjal Shukla, representing the petitioner, argued that according to previous judgments, such as those in M/s Axpress Logistics India Private Limited v. Union of India and M/s Modern Traders v. State of U.P., no penalty should be imposed if the documents are produced after interception but before the detention order is passed. He further contended that the intention to evade tax must be demonstrated by the Department.
However, C.S.C Ravishankar Pandey, the counsel for the respondent, countered that the cited judgements applied to a period before April 2018, when E-Way Bills were not mandatory. Since the interception happened after April 2018, the lack of E-Way Bill and invoice justifies the penalty.
The single bench of Justice Shekhar. B. Saraf held that the absence of these mandatory documents could not be considered a mere technical or typographical error. The burden of proof to establish that there was no intention to evade tax, therefore, shifted to the assessee. In this case, M/S Akhilesh Traders failed to rebut the presumption of tax evasion. The production of documents after the interception did not absolve them of penalty liability.
The court concluded that the penalty serves as a deterrent to prevent tax evasion and ensures compliance with the GST Act.
Therefore, the writ petition was dismissed , and the orders imposing penalty were upheld.
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