2022 (12) TMI 299 - HC - GST

Cancellation of part of E-way bill - Intent to evade tax present or not - driver was carrying part B of e-way bill in respect of which part A has been cancelled - whether this would tantamount to intention to evade payment of duty or with a view to clandestinely move certain goods? - HELD THAT - In our prima facie view, it does not appear so and could be considered to be a bona fide error - The learned Advocate appearing for the appellant would submit that the conduct of the appellant in generating a fresh part B within two hours of detention would clearly show that there was no intention to evade payment of duty. The order passed by the appellate authority is a lengthy order and certain decisions of the High Courts have also been referred to. Partly, the appellant has contributed to such an exercise by the appellate authority by placing reliance on the decisions of the various High Courts, which in our view, may not have been required to have been done as the short point, which was required to be canvassed before the appellate authority was to establish the bona fides of the appellant and to prove that there was no intention to evade payment of duty. Appeal allowed.

Summary

Issues:
1. Application to condone delay in filing the appeal.
2. Challenge against the order imposing a penalty for violating tax rules.

Analysis:
1. The judgment begins with an application to condone a delay of 68 days in filing an appeal. The court, after hearing the appellant's counsel and considering the reasons provided in the affidavit, condones the delay and allows the application for condonation of delay (I.A. No.CAN 1 of 2022) without any costs.

2. The main issue in the appeal (MAT 1777 of 2022) is regarding a penalty imposed for violating tax rules. The appellant challenges an order imposing a 200% penalty for allegedly violating Rule 138 of WBGST/CGST Rules, 2017. The court notes that the appellate authority's order was lengthy and not entirely necessary due to the central issue of whether there was an intention to evade duty. The appellant's explanation regarding the e-way bill discrepancies is considered, and the court opines that it appears to be a bona fide error rather than an intentional evasion.

3. The court emphasizes the need to establish the appellant's bona fides and lack of intention to evade duty. It points out that the appellate authority's decision was overly detailed, referencing unnecessary High Court decisions. The court decides to remand the matter back to the appellate authority for a fresh consideration, focusing on the appellant's conduct and intent to evade payment of duty.

4. Consequently, the appeal is allowed, and the writ petition is also allowed. The appellate authority's order imposing the penalty is set aside, and the matter is remanded for a fresh assessment of whether there was a deliberate intention to evade duty. The appellant is instructed to present all relevant materials without burdening the appellate authority with unnecessary legal precedents.

5. The judgment concludes with no order as to costs and a directive to provide an urgent certified copy of the order to the parties upon compliance with legal formalities. The judgment is delivered by Justice T.S. Sivagnanam, with agreement from Justice Hiranmay Bhattacharyya.