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of <h1>Penalty under s. 129(1) reduced to Rs. 25,000 for no intent to evade tax on e-way bill issues</h1> <h3>M/s. Appollo Plywood Industries & Ors. Versus The Assistant Commissioner of Revenue, State Tax, Bureau of Investigation, North Bengal & Ors.</h3> M/s. Appollo Plywood Industries & Ors. Versus The Assistant Commissioner of Revenue, State Tax, Bureau of Investigation, North Bengal & Ors. - TMI ISSUES: Whether the penalty under Section 129(1) of the WBGST/CGST Act, 2017 is justified for transporting goods without a valid e-way bill when the e-way bill validity expired during transit.Whether the circumstances causing delay in extending the e-way bill validity, such as highway blockage and inclement weather, can mitigate or reduce the penalty imposed.Whether the absence of intent to evade tax affects the imposition and quantum of penalty under Section 129(1) of the Act.The extent of penalty appropriate when goods are transported beyond the e-way bill validity period but no other irregularities or document discrepancies are found. RULINGS / HOLDINGS: Transporting goods without a valid e-way bill may attract penalty under Section 129(1) of the Act; however, the imposition of penalty is not automatic in all cases where the e-way bill has expired during transit.The Court held that the appellants' explanation regarding exceptional circumstances causing delay, including highway blockage due to political rally and inclement weather, was not disputed and must be considered in assessing penalty.In the absence of any allegation or evidence of intent to evade payment of tax, the authority should exercise discretion and consider mitigating factors before imposing penalty at the rate of 200 per cent.The penalty of 200 per cent imposed under Section 129(1) was set aside and reduced to a notional penalty of Rs. 25,000, recognizing the default but also the mitigating circumstances. RATIONALE: The Court applied the statutory framework under Section 129 of the WBGST/CGST Act, 2017, which mandates detention, seizure, and penalty for transporting goods without a valid e-way bill.Rule 138 of the West Bengal GST Rules, 2017, particularly sub-rule (10) and its provisos, allow extension of e-way bill validity under exceptional circumstances within eight hours of expiry, which was not utilized by the appellants.The Court emphasized the non-obstante clause in Section 129(1) but clarified that penalty imposition requires an informed decision considering all relevant facts, including intent and documentary compliance.Reference was made to precedent where similar circumstances led to reduction or setting aside of penalty, indicating a doctrinal approach favoring proportionality and fairness in penalty imposition.The decision reflects a nuanced interpretation that while compliance with e-way bill requirements is mandatory, penalties must be balanced against factual circumstances and absence of tax evasion intent.
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