Vehicle search penalty quashed as E-way bill Part B completed during inspection under Section 129

The HC allowed the petition challenging penalty proceedings under Section 129 of HGST/CGST Act. The petitioner's vehicle was searched and Part B of the E-way bill was not filled, but the driver completed it in the officer's presence. The court held that since there was no malafide intention and the omission was procedural in nature, proceedings under Section 129 should not have been initiated per circular dated 14.09.2018. All other required documents were produced by the driver, and the incomplete Part B was rectified immediately during the search.

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Issues involved:
Petitioner's challenge to order seizing goods due to incomplete E-Way Bills.

Judgment Summary:

Issue 1: Seizure of Goods due to Incomplete E-Way Bills
The petitioner, a company, sold electrical goods but faced seizure of goods during transportation due to incomplete Part B of E-Way Bills. The standby staff, not fully trained, generated the E-Way Bills incompletely. The petitioner, a GST-registered entity with a substantial turnover, maintained proper accounts and promptly paid taxes. Despite responding to a Show Cause Notice, the Assistant Excise and Taxation Officer imposed a hefty pre-deposit penalty. The petitioner's appeal was dismissed, leading to the writ petition challenging the penalty.

Issue 2: Legal Arguments
The respondent argued the violation of CGST/HGST Act and Rules due to incomplete E-Way Bills, emphasizing the importance of carrying valid documents during transportation. The petitioner cited a circular allowing for release of goods on nominal penalty for technical errors. The respondent contended that neither the transporter nor the supplier completed Part B of the E-Way Bill as required by law.

Issue 3: Court's Analysis
The Court referred to the circular permitting release of goods for certain technical errors, including incomplete vehicle numbers in E-Way Bills. Despite the initial omission, the driver rectified the error in the presence of the Officer, indicating no malicious intent. Considering the procedural nature of the error and lack of intention to mislead, the Court held that Section 129 proceedings should not have been initiated.

Conclusion
The Court allowed the petition, setting aside the penalty order and imposing a nominal penalty of Rs. 500 for the incomplete vehicle number, in line with the circular's provisions. The judgment emphasized the importance of procedural fairness and the absence of fraudulent intent in determining the appropriate penalty for technical errors in E-Way Bills.

This summary captures the key details and legal analysis of the judgment regarding the seizure of goods due to incomplete E-Way Bills, highlighting the arguments presented by both parties and the Court's decision based on the relevant legal provisions and circulars.

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