Penalty set aside for alleged tax evasion where valid e-way bill, vehicle breakdown caused delay; refund ordered on proof

HC quashed the impugned orders imposing penalty for alleged tax evasion and directed refund of any amounts deposited within one month on production of a certified copy. Court found an e-way bill had been generated and not cancelled, and the movement and genuineness of the transaction could not be disputed. Delay in delivery resulted from a vehicle breakdown beyond the party's control, and authorities did not record any intention to evade tax. In the absence of intent and given the circumstances, the penalty was held unjustified and the orders liable to be set aside.

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Issues:
The judgment involves the entertainment of a Writ Tax by the High Court due to the non-functionality of the GST Tribunal in Uttar Pradesh. The petitioner challenges orders passed by respondents related to penalty imposition on goods transportation.

Facts:
The petitioner, a registered company engaged in manufacturing and sale of steel, dispatched a consignment to Rajasthan, which got stuck in mud during transit through Uttar Pradesh. Despite efforts to resolve the issue, the vehicle was intercepted, and a penalty of Rs. 8,43,456 was imposed. The petitioner appealed, providing documentary evidence, but the appeal was rejected.

Petitioner's Arguments:
The petitioner contended that valid documents accompanied the goods, and the breakdown was beyond their control. They submitted evidence, including affidavits, to support their claims. The petitioner emphasized that there was no intention to evade tax, and the penalty was unjustified.

Respondent's Arguments:
The respondent argued that the goods lacked proper documentation, as the e-way bill had expired. They justified the penalty imposition based on the violation of rules and failure to provide evidence promptly.

Court's Analysis:
The Court noted that the goods had valid documentation, and the breakdown causing delay was supported by the driver's affidavit. The Court emphasized that the intent to evade tax is crucial for penalty imposition under GST laws.

Precedents and Rulings:
Citing previous cases, the Court highlighted that penalty under GST requires proof of intent to evade tax. In cases where delays or technicalities occur without intent, penalties were quashed. The Court directed authorities to refund any deposited amounts and quashed the impugned orders.

Conclusion:
The Court allowed the writ petition, quashing the orders and directing the refund of any deposited amounts. The judgment reiterated the importance of establishing intent to evade tax for penalty imposition under GST laws.

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