2024 (5) TMI 180 - HC - GST

Levy of maximum penalty - penalty imposed on the basis of technical error - non downloading of E-way Bill-01 was not done with intention to evade tax - HELD THAT - Upon perusal of the record, it appears that the invoice contained the address, the goods matched the description in the invoice and all other materials were intact. The imposition of tax is only on the basis of a technical error. Furthermore, neither in the show cause notice nor in the order under Section 129(3) there was any allegation that non downloading of E-way Bill-01 was done with intention to evade tax. In spite of the same, the respondent authorities have chosen to impose maximum penalty whereas the law provides for lesser penalty under Section 122 of the Act. The issue in the present petition is covered by Division Bench judgment of this Court in Harley Foods Products Ltd. vs. State of U.P. 2018 (11) TMI 704 - ALLAHABAD HIGH COURT , where it was held that 'Goods were accompanied with all the requisite documents including Gujarat e-way bill dated 21.03.2018, therefore, there was no ground to hold that the goods were coming in contravention of the provision of GST Act/Rule and the intention of the petitioner was to evade the payment of Tax' and thus no case made out with regard to evasion of tax. The impugned order is set aside - petition allowed.

Summary

Issues involved:
The issues involved in the judgment are the validity of orders passed under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 and the imposition of penalties for non-compliance with e-way bill requirements.

Validity of Order u/s 129(3) of the Act:
The petitioner challenged the orders dated January 15, 2018, and March 27, 2019, passed by the Assistant Commissioner, Commercial Tax, and the Additional Commissioner, Grade-2 (Appeal)-I, State Tax, respectively. The petitioner argued that there were successive changes in notifications during the relevant period, leading to confusion among field authorities. The Division Bench held that the authorities failed to track legislative changes, resulting in erroneous imposition of penalties. The Court observed that the imposition of tax was based on a technical error, and there was no intention to evade tax. Relying on previous Division Bench judgments, the Court quashed the impugned orders, finding no case of tax evasion.

Imposition of Penalties:
The Court noted that the authorities imposed maximum penalties without alleging intentional tax evasion. The petitioner contended that lesser penalties should have been imposed under Section 122 of the Act. The Court, in line with previous judgments, found no evidence of deliberate fault or intentional disobedience of the law by the petitioners. Consequently, the impugned orders were quashed, and the writ petition was allowed, providing for consequential reliefs.