Unquestionable Transaction Authenticity if E-Way Bill Is Not Cancelled in Time: Allahabad High Court
Fact and issue of the case
Heard Mr. Shubham Agarwal for the petitioner and Mr. Rishi Kumar, learned Additional Chief Standing Counsel for respondent-State.
The instant Writ Tax is being entertained by this Court in view of the fact that G.S.T. Tribunal is not functional in the State of Uttar Pradesh pursuant to the Gazette notification of the Central Government bearing number CG-DL-E-14092023-248743 dated 14.09.2023.
By means of present petition, the petitioner is assailing the order dated 9.6.2023 passed by respondent no. 4 and the order dated 17.6.2023 passed by respondent no. 3.
Brief facts of the case as stated in the writ petition, are that the petitioner is a registered company having GST No. 27AACCS3376C1ZH and engaged in the business of manufacturing & sale of basic iron and steel etc. In the normal course of business the petitioner dispatched the consignment of 30 ton of non-alloy steel in rolled round to M/s Hi-Tech Gears Limited, Bhiwadi, Rajasthan accompanying Invoice No. 232705612 dated 26.5.2023 as well as E-way Bill No. 281596024395 dated 26.5.2023 through Vehicle No. UP 94 T 6681 of Supersonic Carrier Private Limited. The said E-way was generated on 26.5.2023 and was valid up to 1.6.2023. During the onward journey from Maharastra to Rajasthan, the goods were passing through State of UP, on 28.5.2023 where at about 1:00-2:00 P.M. the vehicle was struck in mud at the side of road because of heavy load of consignment and thereafter with the help of crane the vehicle could be pulled out and after removing the break down by the mechanic the vehicle could be moved for its onward journey. On the intervening night of 2/3.6.2023, at around 10:00 A.M. the vehicle was intercepted and show cause notice was issued on 4.6.2023 which was replied by the petitioner accompanying the affidavit of driver of the vehicle however being not satisfied with the reply, the impugned order has been passed demanding a sum of Rs. 8,43,456/- as penalty. Against the said order, the petitioner has preferred an appeal, which has been rejected by the impugned order dated 17.6.2023. Hence the present writ petition.
Learned counsel for the petitioner has submitted that goods in question was accompanying with the valid documents ie. e-tax invoice, e-way bill, G.R. and the validity of e-way bill was up to 1.6.2023 and the goods in question during its onward journey from Maharastra to Rajasthan was passing through the State of UP where the vehicle was got struck in mud on the road side due to heavy load of consignment and in spite of several efforts, the vehicle could not be pulled out but on 29.5.2023, the truck was pulled out with the help of crane and after pulling out the vehicle, when the engine could not start as some break down was caused, the driver had immediately contacted to the mechanic on 30.5.2023 and as various spare parts were not available in local market of Lalitpur, he went to Jhansi along with the mechanic for purchase of spare parts and within two days the vehicle could be repaired and thereafter was ready to move for its onward journey, however the same was intercepted in the night of 2/3-6.2023 and show cause notice was issued.
He submitted that while replying the show cause notice, the petitioner has annexed the affidavit of truck driver wherein the said incident was categorically mentioned in detail. He further submitted that while passing the impugned order dated 6.9.2023, the said contention was denied but without giving due weightage, the order was passed imposing penalty of Rs. 8,43,456/-, against which an appeal was preferred by the petitioner annexing all the documentary evidences such as e-tax invoice, spare part purchase receipts, mechanic charge payment receipt as well as other evidences but the first appellate authority had rejected the appeal on the ground that these grounds were not filed before the lower authority. He further submitted that the authorities below have disbelieved the contention of the petitioner that vehicle got struck in mud and caused breakdown. He further submitted that none of the authorities below have recorded any finding in respect of evade of payment of tax, therefore, the penalty is not justified in the eyes of law and impugned order is liable to be set aside. He prays for allowing the writ petition.
Per contra, Rishi Kumar, learned A.C.S.C. has supported the impugned orders and submitted that proceedings have been initiated against the petitioner under Section 138 (1) of the GST Act. He further submitted that the goods in question was not accompanying with the proper documents as prescribed under the Act as well as Rules framed thereunder as at the time of inspection, e-way bill accompanying with the goods has already been expired on 1.6.2023. He submitted that the petitioner has failed to justify for not filing the documentary evidence at the time of detention. He further submitted that there is violation of the provisions of Rule, therefore, penalty proceeding is justified. He prays for dismissing the writ petition.
After hearing learned counsel for the parties, the Court has perused the records.
Observation of the court
Punjab & Haryana High Court, in the case of M/s Raghav Metals Vs. State of Haryana & Others [CWP No. 25057/2021, decided on 14.03.2022] has held as under:-
Keeping in view these circumstances, it cannot be said that the petitioner had any intent to evade the tax or the mismatch in the quantities is of such nature which shall entail proceedings under Section 129 of the Act. A person, who has already paid a tax of Rs.1276717.68/- on a consignment cannot be said to have an intent to evade tax amounting to Rs.11000/-. At this stage, Mr. Goyal states that the petitioner is ready to pay even the tax and penalty imposed by the State-Authorities which comes to be around Rs.22000/-.
In light of the fair stand taken by the petitioner and the fact that the mismatch cannot be termed as contravention of the provisions of the Act, we deem it appropriate to allow the present writ petition. Proceedings against the petitioner under Section 129 of the Act are hereby quashed. Fine and penalty, if any, imposed against the petitioner and deposited by him, be refunded to him within a period of 15 days from the date of receipt of certified copy of this order. Since goods already stand released, no further order is required.”
The fact remains that vehicle could not reach its destination within the time mentioned in the e-way bill as the situation is beyond control of the petitioner as mentioned in the affidavit of driver of the vehicle and there was also no intention of the petitioner to evade the payment of tax, thus the impugned orders are not justified in the eyes of law and are liable to be quashed.
The writ petition is allowed. The impugned orders dated 9.6.2023 and 17.6.2023 are quashed.
The authorities below are directed to refund the amount, if any, deposited by the petitioner in pursuance of the impugned orders, within a period of one month from the date of production of certified copy of this order before the concerned authority.
Read the full order from here
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