Taxpayer Wins Challenge Against GST Penalty for Technical E-Way Bill Error, Court Emphasizes Lack of Tax Evasion Intent

HC allowed the petition challenging penalty under Section 129(3) of UP GST Act for non-filling of e-Way Bill Part 'B'. The court found no intention to evade tax, noting the goods matched the invoice. Citing precedents, the HC quashed penalty orders and directed return of security within six weeks, emphasizing technical errors without mens rea should not attract penalties.

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Issues involved:
The issues involved in the judgment are the imposition of penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 for non-filling of Part 'B' of the e-Way Bill, and the absence of intention to evade tax.

Imposition of Penalty:
The petitioner challenged an order levying penalty under Section 129(3) of the Act for not filling up Part 'B' of the e-Way Bill, along with the dismissal of the appeal against the said order. The record shows that the controversy solely pertains to the non-filling of Part 'B' of the e-Way Bill. It is undisputed that the invoice contained details of the truck carrying the goods, the goods matched the invoice, and there was no evidence of the petitioner's intention to evade tax. Citing precedents, the petitioner argued that the mere non-filling of Part 'B' without intent to evade tax should not lead to penalty imposition.

Legal Precedents and Arguments:
The petitioner referenced judgments in VSL Alloys (India) Pvt. Ltd v. State of U.P. and M/s Citykart Retail Private Limited cases to support the argument that non-filling of Part 'B' without intent to evade tax should not attract penalty under Section 129(3). The appellate authority confirmed the non-filling of Part 'B' as per the petitioner's contention.

Judicial Analysis and Decision:
Comparing the present case to M/s Citykart Retail Pvt. Ltd.'s case, the Court found similarities and concluded that the technical error of not filling Part 'B' without intent to evade tax should not warrant a penalty. The absence of mens rea on the petitioner's part for tax evasion further supported the decision to quash the orders dated December 22, 2021, and January 20, 2022. Consequently, the petition was allowed, and the respondents were directed to return the security to the petitioner within six weeks.

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