E-way bill Part-B missing due to technical glitch; seizure and penalty quashed, refund ordered after no tax evasion evidence.

Penalty and seizure were challenged on the ground that Part-B of the e-way bill was not filled due to a technical glitch. The HC held that mere non-filling of Part-B, absent any allegation or material showing transportation without payment of tax, does not establish intent to evade tax, particularly where the taxpayer's explanation was corroborated by Ministry of Finance circulars/advisories acknowledging systemic difficulties in filling Part-B. Consequently, the seizure/penalty order could not be sustained, and the writ was allowed with a direction to refund the amount collected pursuant to the impugned order within two months.

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Issues:
Challenge to demand/penalty order dated 18.04.2018 and appellate order dated 14.05.2019; Refund of penalty amount; Allegation of incomplete e-way bill leading to goods seizure.

Analysis:
The petitioner, a company engaged in Trading of Ready-made garments, challenged the demand/penalty order and the appellate order passed by the authorities. The issue arose when the respondent inspected the goods being transported by the petitioner's vehicle and found the e-way bill incomplete, leading to goods' detention and subsequent seizure. The petitioner explained that a technical glitch resulted in the e-way bill's Part-B not being filled, as the vehicle number was not registered due to a technical error. The petitioner argued that the department acknowledged this technical issue in a Clarificatory Circular, advising on the correct form filling. The petitioner contended there was no intent to evade duty, supported by the Circulars issued by the Ministry of Finance addressing similar issues.

The petitioner highlighted the Circular dated 14.09.2018, emphasizing that minor errors, such as missing digits/characters in the vehicle number, should not invoke penalty under section 129 of the CGST Act. The petitioner also referenced a previous judgment where the court set aside a seizure order in similar circumstances. The Standing Counsel defended the impugned order, disputing the technical glitch explanation provided by the petitioner.

The Court noted that the only allegation against the petitioner was the incomplete Part-B of the e-way bill, with no accusation of tax evasion. The petitioner's explanation for the error was supported by Ministry Circulars addressing such problems. The Court found no intent to evade duty, especially considering the vehicle's Delhi number registration, similar to a previous judgment's scenario. Consequently, the impugned orders were set aside, and the writ petition was allowed, directing the respondents to refund the amount paid by the petitioner within two months.

In conclusion, the Court ruled in favor of the petitioner, emphasizing the technical nature of the error in the e-way bill and the absence of any intent to avoid tax payment. The judgment underscored the importance of considering technical glitches and relevant circulars in such cases to prevent undue penalization.

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