2024 (3) TMI 219 - HC - GST

Levy of penalty - Actual intention to evade tax on part of the petitioner (mens rea) or not - petitioner failed to produce the e-way bill in time due to certain difficulties - HELD THAT - It is a well settled position of law that if there is no intention to evade tax on the part of a person then imposition of tax and penalty is not proper and justified. But there must be some reasonable grounds to show that there was actually no intention to evade tax on the part of tax payer. In the present case it is an admitted fact that neither invoice nor e-way bill were accompanying the goods when it was intercepted by the authorities. This contravention of rules can not be treated as a mere common mistake. In this situation burden of proof for establishing that there was no intention to evade tax shifts to the assessee. This court in case of M/s Akhilesh Traders V. State of U.P. and 3 others 2024 (2) TMI 1128 - ALLAHABAD HIGH COURT has held that in cases where the goods are not accompanied by the invoice and e-way bill a presumption may be raised that there is an intention to evade tax. The petitioner in the present case could not explain the absence of invoice and e-way bill with a proper and reasonable explanation. Ergo he has not been able to rebut the presumption of evasion of tax - Mere furnishing of the documents subsequent to the interception can not be a valid ground to show that there was no intention to evade tax. There must be some reasonable grounds to justify the non-production of documents at the proper time. The argument raised by the counsel appearing on behalf of the petitioner that the vehicle was parked at the godown for unloading is not supported by the facts. The interception of the vehicle was in a place away from the godown and this entire argument is obviously an afterthought. Accordingly the application of Section 129(3) of the Act by the authorities is valid and just in law. The petitioner herein has not complied with the provisions of law hence the steps taken by the respondent authorities are proper and in accordance with the law and require no interference by this court - Petition dismissed.

Summary

Issues involved:
The issues involved in this case are related to the legality of the seizure and penalty imposed on the petitioner for the transportation of goods without proper documentation, specifically the absence of an e-way bill and invoice during interception by authorities.

Facts:
The petitioner, a registered dealer under the Goods and Services Tax Act, sold a consignment of TMT Bars to a buyer. The vehicle transporting the goods was intercepted by authorities, who found that the necessary documents such as e-way bill and invoice were not produced at the time of interception. Despite later submission of these documents, the authorities imposed a penalty on the petitioner for contravention of tax laws.

Contentions of the Petitioner:
The petitioner argued that the delay in generating the e-way bill was due to unforeseen circumstances, and there was no intention to evade tax. They cited previous court judgments where seizure and penalty were not justified if the e-way bill was downloaded before seizure and tax was paid. The petitioner also contended that the vehicle was parked for unloading at the time of interception, and all relevant documents were submitted before the seizure order.

Contentions of the Respondents:
The respondents argued that the petitioner failed to comply with the legal requirement of generating the e-way bill before transportation, leading to the seizure of goods. They emphasized the importance of following tax laws and cited court judgments supporting the seizure and penalty in cases of non-compliance with documentation requirements.

Analysis and Conclusion:
The court considered the arguments presented by both parties and reviewed relevant legal provisions. It noted that the absence of invoice and e-way bill during interception raised a presumption of intention to evade tax. The court found that the petitioner failed to provide a satisfactory explanation for the missing documents and did not rebut the presumption of tax evasion. Additionally, the court highlighted that post-interception submission of documents does not absolve the petitioner from liability. The court also dismissed the argument that difficulties in generating e-way bills before April 2018 justified the petitioner's actions. Ultimately, the court upheld the seizure and penalty imposed on the petitioner, stating that the actions of the authorities were lawful and required no intervention.

Judgment:
The court dismissed the writ petition filed by the petitioner, affirming the legality of the seizure and penalty imposed by the authorities for non-compliance with documentation requirements under the tax laws.