2024 (2) TMI 183 - HC - GST

Judicial Relief: Technical E-Way Bill Violation Leads to Penalty Quashing Under UPGST Act Section 129(3)

HC quashed penalty order under Section 129(3) of UPGST Act for technical e-way bill non-compliance. Court found no intention to evade tax and relied on ... Penalty under Section 129(3) of the UPGST Act - non-filling of Part B of the e-way bill - absence of intention to evade tax - technical defect in e-way bill - quashing of departmental and appellate ordersPenalty under Section 129(3) of the UPGST Act - non-filling of Part B of the e-way bill - absence of intention to evade tax - technical defect in e-way bill - Whether the penalty imposed under Section 129(3) of the UPGST Act for non-filling of Part B of the e-way bill is sustainable where there is no intention to evade tax and the defect is technical - HELD THAT: - The Court found on the material placed before it that the department failed to demonstrate any intention on the part of the petitioner to evade tax, and that the omission was technical in nature. The petitioner relied on precedents including M/S Roli Enterprises and earlier decisions of this Court considering non-filling of Part B of the e-way bill, which hold that mere non-filling of Part B, without proof of intent to evade tax, does not warrant imposition of penalty under Section 129(3). Applying that principle, and noting the absence of any defect in the consignment or documentary discrepancy, the Court concluded that the statutory penal power could not be exercised in the present facts. The appellate order affirming the penalty was therefore also unsustainable. [Paras 5, 6, 7, 8]Penalty under Section 129(3) set aside and consequential departmental and appellate orders quashed for lack of intention to evade tax where the omission to fill Part B was a technical defectFinal Conclusion: The writ petition is allowed; the orders dated April 22, 2021 and November 20, 2021 are quashed and set aside, and the respondents are directed to return the security to the petitioner within six weeks. Issues involved:The issues involved in the judgment are the imposition of penalty under Section 129(3) of the Uttar Pradesh Goods and Service Tax Act, 2017, and the validity of the orders dated April 22, 2021, and November 20, 2021.Imposition of Penalty under Section 129(3) of UPGST Act:The writ petitioner challenged the penalty order dated April 22, 2021, and the order of the Appellate Authority dated November 20, 2021, under Section 129(3) of the UPGST Act. The petitioner argued that although part A of the e-way bill was filled, technical difficulties prevented the generation of part B. The goods in question were custom-made with specific specifications for a particular consignee, and there were no defects or discrepancies in the consignment. The petitioner relied on a previous judgment of the Allahabad High Court which held that the non-filling of part 'B' of the e-Way Bill without any intention to evade tax would not warrant a penalty under Section 129(3) of the UPGST Act.Contentions of the Parties:The counsel for the respondents contended that part 'B' of the e-Way Bill was not filled as per the penalty order and the decision of the Appellate Authority. However, upon reviewing the arguments and documents presented by both parties, the court found no evidence of the petitioner intending to evade tax. The court noted that the judgments cited by the petitioner were directly relevant to the case, and there was no justification to deviate from them.Judgment and Conclusion:The court concluded that the technical defect in not filling part 'B' of the e-Way Bill did not indicate any intention to evade tax. Therefore, the penalty imposed under Section 129(3) of the UPGST Act was deemed unsustainable. Consequently, the court quashed and set aside the orders dated April 22, 2021, and November 20, 2021. The writ petition was allowed, and the respondents were directed to return the security to the petitioner within six weeks.