Omission of Transporter's Name on E-Way Bill Not Tax Evasion Under Section 129 GST Act, Penalty Quashed

The HC held that the omission of the transporter's name on the e-way bill, despite inclusion of the truck number and other details, did not demonstrate an intent to evade tax or penalty under section 129 of the GST Act. The evidence showed the goods were transported within Delhi for full truck load delivery to the petitioner's godown, and no finding of tax evasion was made. Consequently, the penalty proceedings were unjustified. The impugned orders dated 30.04.2021 and 23.10.2021 were quashed, and the petition was allowed.

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ISSUES:

Whether non-mention of the transporter's name on the e-way bill constitutes sufficient ground for detention, seizure, and penalty under section 129(3) of the GST Act.Whether the goods were in lawful transit from Delhi to Delhi as per accompanying documents despite the alleged discrepancy in the driver's statement.Whether there was any intention to evade payment of tax justifying penalty proceedings under section 129 of the GST Act.Whether the impugned orders detaining and seizing goods and imposing penalty under section 129(3) of the GST Act can be sustained in absence of evidence of tax evasion or improper destination declaration.

RULINGS / HOLDINGS:

The court held that "merely on a technical ground of breach for not mentioning the name of the transporter," detention and seizure under section 129(3) of the GST Act cannot be justified without evidence of intention to evade tax.The court found that the goods were transported from Delhi to Delhi with requisite documents including tax invoice, e-way bill, and GR, and that the alleged discrepancy in the driver's statement regarding destination was explained by the common practice of transporting goods via transport godowns located between Delhi and Ghaziabad.In absence of any finding regarding intention to evade payment of tax, penalty proceedings under section 129 of the GST Act "cannot be attracted and therefore, the same cannot be justified."The impugned orders of detention, seizure, and penalty under section 129(3) of the GST Act were quashed as unsustainable in law.

RATIONALE:

The court applied the statutory provisions of section 129(3) of the GST Act concerning detention, seizure, and penalty for improper transit of goods.The court relied on the principle that penalty under section 129 requires a finding of intention to evade tax, referencing precedents including a High Court decision and the Supreme Court judgment in Assistant Commissioner (ST) v. M/s. Satyam Shivam Papers Pvt. Ltd.The court emphasized that a mere technical or procedural lapse, such as omission of the transporter's name on the e-way bill, without evidence of tax evasion or misdeclaration of destination, does not justify punitive action under section 129.The judgment recognized the practical realities of transportation logistics, noting that transport godowns located in no man's land between Delhi and Ghaziabad explain the routing and destination declarations.

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