GST penalty upheld for transporting goods without e-way bill despite no tax evasion intent claim

The Uttarakhand HC dismissed a petition challenging penalty imposition for transporting goods without an e-way bill. The court held that both goods owners and transporters have duty to generate e-way bills under GST rules. Despite petitioner's argument that it was mere rule violation without tax evasion intent, the court found evidence indicating deliberate tax evasion. The HC ruled that penalties under Sections 164(4) and 122(1)(xiv) don't preclude action under Section 130 when circumstances show evasion intent. The court upheld the penalty order, finding no grounds for interference with the authority's decision.

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Issues Involved:
1. Imposition of penalty under Section 130 of the Central/Uttarakhand Goods and Services Tax Act, 2017.
2. Requirement and generation of e-way bill.
3. Intent to evade tax as a criterion for confiscation under Section 130 of the Act.
4. Applicability of penalties under Sections 122(1)(xiv) and 164(4) of the Act.
5. Validity of the impugned order dated 07.02.2023.

Summary:

1. Imposition of penalty under Section 130 of the Act:
The petitioner challenged the order dated 07.02.2023 by the Assistant Commissioner, State Tax, imposing a penalty under Section 130 of the Act. The petitioner claimed to be the owner of the vehicle and contested the penalty imposed in lieu of confiscation of the vehicle, asserting he was merely a transporter and not in connivance with the owner of the goods.

2. Requirement and generation of e-way bill:
The petitioner was intercepted without carrying an e-way bill. The respondents argued that the petitioner, as the transporter, was required to generate and carry the e-way bill under Rule 138A of the Rules. The petitioner contended that it was the duty of the owner of the goods to generate the e-way bill.

3. Intent to evade tax as a criterion for confiscation under Section 130 of the Act:
The petitioner argued that mere failure to carry an e-way bill does not attract Section 130 unless there is an intent to evade tax. The court referred to the case of Synergy Fertichem Pvt. Ltd. v. State of Gujarat, which emphasized that intent to evade tax must be established for confiscation under Section 130.

4. Applicability of penalties under Sections 122(1)(xiv) and 164(4) of the Act:
The petitioner argued that the penalty for not carrying an e-way bill should be limited to Rs. 10,000 under Section 164(4) or Section 122(1)(xiv) of the Act. The court clarified that these penalties do not exclude the operation of Section 130, which deals with confiscation.

5. Validity of the impugned order dated 07.02.2023:
The court found multiple factors indicating the petitioner's intent to evade tax, including transportation without an e-way bill, incorrect route, and discrepancies in statements. The impugned order was based on these factors, and the court found no reason to interfere with it. The writ petition was dismissed.

Conclusion:
The court upheld the penalty imposed under Section 130 of the Act, emphasizing the requirement of an e-way bill and the intent to evade tax as valid grounds for confiscation. The writ petition was dismissed.

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