E-way Bill Penalty Overturned: Tax Authorities Lack Justification for Imposing Penalties Against Established GST Council Guidelines

HC allowed the writ petition challenging tax and penalty orders related to e-way bill requirements. The court found tax authorities unjustified in imposing penalties, referencing prior precedents that confirmed GST Council's waiver of e-way bill requirements until 31.03.2018. The impugned orders were quashed, and the deposited amount was directed to be released within fifteen days.

---

---

Issues:
Quashing of tax and penalty orders based on the validity of e-way bill dispensation by GST Council till 31.03.2018.

Analysis:
The petitioner filed a writ petition seeking to quash the tax and penalty orders imposed by the Assistant Commissioner, Sales Tax/State Tax, Mobile Squad, II Unit, Shamli, based on the interception of goods being transported from U.P. to Punjab on 21.02.2018. The petitioner argued that an e-way bill was generated on 17.02.2018, during a period when the GST Council had dispensed with the requirement of e-way bills until 31.03.2018. The petitioner relied on the decision in the case of M/S Godrej & Boyce Manufacturing Co. Ltd. Vs. State of U.P. & Others and M/S HBL Power Systems Ltd. Vs. State of U.P. & Others to support their claim.

The Standing Counsel contended that the e-way bill downloaded by the petitioner had expired by the time the goods were intercepted, and the petitioner did not possess the required e-way bill as mandated under the Act/Rules. After hearing both parties and reviewing the evidence, the Court noted that the GST Council had indeed waived the necessity of carrying e-way bills until 31.03.2018. The Court referred to the decision in the case of M/S Godrej & Boyce Manufacturing Co. Ltd. and M/S HBL Power Systems Ltd., which had already addressed and settled the issue regarding the dispensation of e-way bills during the relevant period.

Consequently, the Court found that the tax authorities were unjustified in imposing tax and penalties on the petitioner. Therefore, the orders dated 31.07.2021 by the first appellate authority and 01.07.2020 by the Assistant Commissioner were deemed unsustainable in the eyes of the law and were quashed. The writ petition was allowed, and it was directed that the amount deposited by the petitioner pursuant to the orders be released within fifteen days.

---