2022 (7) TMI 603 - HC - GST

Detention of goods alongwith vehicle - Levy of tax and penalty - at the time of interception, the validity period of the E-Way bill stood expired - HELD THAT - After going through the order of adjudicating as well as the order passed by the appellate authority, this Court finds that the authorities have not returned any finding that there was any deliberate and willful attempt on the part of the writ petitioner to evade payment of tax. In order to justify invocation of the power to impose penalty in terms of the said Act, it is necessary that such authority arrives at a definite finding that there was a deliberate and willful attempt on the part of the assessee to evade tax or there is lack of bona fide. This Court already held that there is no lack of bona fide on the part of the writ petitioner in the instant case for not extending the validity period of the E-Way bill within the short period of time. It is also not a case of willful attempt on the part of the writ petitioner to evade payment of tax - It is the admitted position that the petitioner has paid the amount of penalty levied by the adjudicating authority and the vehicle was also released thereafter. Tax with penalty set aside - application allowed.

Summary

Issues:
Challenge against order rejecting appeal on tax and penalty imposition based on expired E-Way bill validity.

Analysis:
1. Background: The writ petitioner, engaged in energy projects, purchased a Hydraulic Mobile Crane from Haryana for a Sikkim project. The crane was detained during transportation due to an expired E-Way bill.

2. Adjudication Order: The Assistant Commissioner held the movement of goods violated tax laws and imposed tax and penalty. The petitioner appealed under Section 107 of the WBGST Act, but the appellate authority upheld the decision.

3. Petitioner's Argument: The petitioner argued that the delay in extending the E-Way bill validity was due to a Sunday and lack of immediate instructions. Reference was made to a similar case where penalty imposition was not justified for a minor delay.

4. State's Argument: The State contended that modern technology simplifies E-Way bill extension, justifying the detention. The State argued that the breach was not minor and upheld the decision-making process.

5. Court's Decision: The Court noted no dispute on goods' details and the expired E-Way bill at interception. It considered the delay reasonable due to the heavy nature of the goods and lack of benefit to the petitioner from the delay. The Court cited a similar case where bona fides were crucial in determining penalty imposition.

6. Key Rulings: The Court emphasized the importance of bona fides in deciding penalty imposition and lack of deliberate tax evasion. It found no lack of bona fide in the petitioner's actions and no willful attempt to evade tax.

7. Judgment: The Court set aside all previous orders, directing the refund of tax and penalty paid by the petitioner. The judgment clarified that it is based on the specific case's circumstances and not a general precedent.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, the Court's reasoning, and the final decision, providing a comprehensive understanding of the legal proceedings and outcome.