Intent to evade tax is essential for maximum GST penalty; absence of such allegation makes the order unsustainable.

An order under the Uttar Pradesh GST Act, 2017 imposing the maximum penalty for alleged non-downloading of E-way Bill-01 was quashed because neither the show-cause notice nor the order alleged intent to evade tax. The court applied earlier Division Bench guidance on confusion arising from rapid changes in the e-way bill regime and held that, in the absence of an allegation of evasion, the harsher penalty was unsustainable where a lesser penalty was contemplated. The appellate order was also set aside, and the writ petition was allowed.

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Issues: Whether the order under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 and the appellate order were liable to be quashed where the record disclosed no allegation of intent to evade tax and the authorities imposed the maximum penalty.

Analysis: The writ petition was examined in the light of earlier binding Division Bench decisions dealing with rapid changes in the e-way bill regime and the consequent confusion at the field level. The record showed that neither the show-cause notice nor the order under Section 129(3) contained any allegation that the alleged non-downloading of E-way Bill-01 was with intent to evade tax. In such circumstances, and where the law contemplated a lesser penalty under Section 122, the imposition of the maximum penalty was unsustainable.

Conclusion: The impugned orders were not sustainable in law and were quashed. The writ petition was allowed.

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