Mere Furnishing of Documents Subsequent to Interception not sufficient to show lack of Intention to Evade Tax: Allahabad HC [Read Order]

In a recent decision, the Allahabad High Court ruled that mere furnishing of the documents subsequent to the interception cannot be a valid ground to show that there was no intention to evade tax and there must be some reasonable grounds to justify the non-production of documents at the proper time.

The writ petition was filed under article 226 of the Constitution of India wherein the petitioner has prayed for the issuance of a writ of certiorari quashing the appellate order passed by Additional Commissioner Grade-2 (Appeal), Commercial Tax, Jhansi/the respondent No. 3 and the penalty order passed by Assistant Commissioner, Commercial Tax, (Mobile Squad) Unit Jalaun, Agra/the respondent No.2. Further, a mandamus has been sought directing the respondent authorities to refund the amount of tax and penalty deposited by the petitioner.

A show cause notice was issued to the petitioner under Section 129(3) of the Act stating that the movement of the goods was in contravention to the provisions of the Act. e. In pursuance of the show cause notice, the petitioner appeared before the authority and duly submitted his written reply. In his reply, the petitioner stated that due to non availability of computer operator, the e-way bill related to the goods in transit could not be generated at proper time but the same was generated later at 2:45 P.M. on March 10, 2019.

The counsel for the petitioner contended that the petitioner could not generate the e-way bill prior to the commencement of transportation because the computer operator, who was assigned the duty of generating the e-way bill, did not arrive earlier and the person looking after the dispatch inadvertently dispatched the goods on the belief that the e-way bill would be generated within a short while after the arrival of the computer operator who generates the e-way bill.

Since the petitioner had already deposited the tax on the consignment of seized goods and the relevant transaction had also been disclosed in the returns furnished by him, hence there was no intention to evade tax on his part and thus the impugned orders passed by the authorities are liable to be set aside.

The counsel for the respondents submitted that the petitioner has submitted a vague reply of non availability of computer operator. In this regard, it is submitted that the generation of e-way bill is required as mentioned in Rule 138 of the Rules and therefore, it was obligatory on the petitioner to have generated the e-way bill which was not done and therefore, the provisions were not followed by the petitioner.

A Single Bench of Justice Shekhar B. Saraf observed that “The petitioner, in the present case, could not explain the absence of invoice and e-way bill with a proper and reasonable explanation. Ergo, he has not been able to rebut the presumption of evasion of tax. Mere furnishing of the documents subsequent to the interception cannot be a valid ground to show that there was no intention to evade tax. There must be some reasonable grounds to justify the non-production of documents at the proper time.”

“The argument raised by the counsel appearing on behalf of the petitioner that the vehicle was parked at the godown for unloading is not supported by the facts. The interception of the vehicle was in a place away from the godown and this entire argument is obviously an afterthought. Accordingly, the application of Section 129(3) of the Act by the authorities is valid and just in law” the Court noted.

To Read the full text of the Order CLICK HERE

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