Seizure orders under GST Act section 129(3) quashed when e-way bills produced before seizure without tax evasion intent

The Allahabad HC quashed seizure orders under section 129(3) of the GST Act where goods were transported with all relevant documents except e-way bill. The court found that the e-way bill was produced before the seizure order was passed and no finding was recorded regarding intention to evade tax. Following precedent in M/s Falguni Steels, the HC held that seizure orders cannot be sustained when e-way bills are produced before seizure orders are passed and there's no evidence of tax evasion intent. The petition was allowed and impugned orders were quashed.

---

---

Issues:
Challenge to seizure order under section 129(3) of the GST Act due to non-generation of e-way bill leading to penalty and interest imposition. Dispute over intention to evade tax and validity of seizure order.

Analysis:
The petitioner, a partnership concern registered under the GST Act, challenged the seizure order of goods due to a missing e-way bill, despite all other documents being in order. The petitioner contended that the e-way bill was produced before the seizure order, indicating no intention to evade tax. The petitioner's appeal was dismissed, leading to the writ petition.

The petitioner argued that no discrepancy was found with the goods, and the e-way bill submission before the seizure order should have led to the release of goods. The absence of any finding on tax evasion intention was highlighted, citing precedents like M/s Falguni Steels and M/s Bans Steel judgments to support the argument against penalty imposition without intent to evade tax.

In contrast, the ACSC supported the seizure, alleging that the delayed e-way bill submission showed an intention to evade tax. The court noted that all relevant documents were present with the goods, and the e-way bill was submitted before the seizure order. The absence of a determination on tax evasion intention was crucial, as per the M/s Falguni Steels judgment, which emphasized the need for intent to evade tax for penalty imposition.

The court referenced the M/s Bans Steel case, where the submission of the e-way bill before the seizure order cured any discrepancies, leading to the quashing of the penalty. Based on the facts and legal precedents, the court ruled in favor of the petitioner, quashing the impugned orders under section 129(3) of the GST Act and directing the refund of tax and penalty amounts, if any, deposited by the petitioner.

In conclusion, the judgment highlighted the importance of intent to evade tax for penalty imposition, emphasizing the need for proper documentation and adherence to legal procedures in cases of seizure orders under the GST Act.

---