2024 (2) TMI 1128 - HC - GST

Levy of penalty - no E-Way Bill, invoice and bilty were present in the vehicle carrying the goods - onus to prove (shifting burden) - burden of proof with regard to intention to evade tax shifts from the Department to the assessee - HELD THAT - In the present case, the facts are undisputed that neither invoice nor E-Way Bill were accompanying the goods. Such a contravention to the Rules cannot be treated to be a mere technical or typographical mistake, and accordingly, in such cases, the burden of proof for establishing that there was no mens rea for evasion of taxes shifts to the assessee - This Court in umpteen cases where penalties were being imposed under Section 129 of the Act though held that an intention to evade tax should be present, however, in the event the goods are not accompanied by the invoice or the e-way bill, a presumption may be raised that there is an intention to evade tax. Such a presumption of evasion of tax then becomes rebuttable by the materials to be provided by the owner/transporter of the goods. In the present case, one comes to an inexorable conclusion that the petitioner has not been able to rebut the presumption of evasion of taxes, as he has not been able to explain the absence of invoice and the E-Way Bill. Production of these documents subsequent to the interception cannot absolve the petitioner from the liability of penalty as the very purpose of imposing penalty is to act as a deterrent to persons who intend to avoid paying taxes owed to the Government. It is clear that if the goods had not been intercepted, the Government would have been out of its pocket with respect to the GST payable on the said goods. Thus, no interference is required with regard to the impugned orders - petition dismissed.

Summary

Issues involved:
The imposition of penalty under Section 129(3) of the Uttar Pradesh Goods and Services Act, 2017 based on the absence of E-Way Bill, invoice, and bility in the intercepted goods.

Summary:
The petitioner challenged the penalty imposed by the Assistant Commissioner and the order passed by the Additional Commissioner, Grade-2 (Appeal) under Article 226 of the Constitution of India. The petitioner produced the required documents after interception, arguing that no penalty should be levied based on previous court judgments. The Department contended that post-April 2018, E-Way Bill is mandatory and the burden of proof shifts to the assessee if documents are not present during interception. The Court noted that in cases where goods lack necessary documents, a presumption of tax evasion may arise, which can be rebutted by the owner/transporter. As the petitioner failed to explain the absence of invoice and E-Way Bill, the Court upheld the penalty, emphasizing its role as a deterrent against tax evasion.

In conclusion, the Court found that the petitioner did not rebut the presumption of tax evasion due to the absence of required documents with the intercepted goods. The production of documents post-interception did not absolve the petitioner from penalty liability, as the purpose of penalties is to deter tax evasion and ensure the Government receives the taxes owed. Therefore, the Court dismissed the writ petition, upholding the impugned orders.