2024 (8) TMI 453 - HC - GST

Detention of goods - Part B of the E-way bill was not duly filled - HELD THAT - It is not in dispute that there was no variation with regard to the documents and goods detained/seized. It is also not in dispute that the Part B of E-way bill, even before issuance of notice and before passing of the seizure order, was duly filled and was produced before the authority. It is also not the case of the revenue that the authorities below have recorded any finding with regard to mens rea i.e. intention of petitioner to evade payment of tax. This Court in the case of M/S ROLI ENTERPRISES VERSUS STATE OF U.P. AND 2 OTHERS 2024 (1) TMI 813 - ALLAHABAD HIGH COURT held that ' I see no reason why this Court should take a different view of the matter, as the invoice itself contained the details of the truck and the error committed by the petitioner was of a technical nature only and without any intention to evade tax. Once this fact has been substantiated, there was no requirement to levy penalty under Section 129(3) of the Act.' Similarly, this Court in the case of PRECISION TOOLS INDIA VERSUS STATE OF U.P. AND 3 OTHERS 2024 (2) TMI 183 - ALLAHABAD HIGH COURT held that ' In the present case also, the defect was of a technical nature only and without any intention to evade tax. Accordingly, the penalty imposed under Section 129(3) of the UPGST Act is unsustainable.' The orders dated April 22, 2021 and November 20, 2021 are quashed and set aside. The writ petition is allowed.

Summary

Issues:
Challenge to orders passed by Additional Commissioner and Assistant Commissioner regarding detention of goods due to E-way bill issue.

Analysis:
The petitioner, a registered company under UPGST Act, challenged orders dated 08.03.2022 and 10.01.2022 passed by Additional Commissioner and Assistant Commissioner, respectively, regarding the detention of goods. The petitioner dispatched footwears from Agra to Maharashtra with all necessary documents, but the goods were detained on 08.01.2022 due to an issue with Part B of the E-way bill. The petitioner contended that it was a human error, and there was no intention to evade tax as all accompanying documents were in order. The revenue argued that the proceedings were rightly initiated due to the violation of the act and rule.

The court noted that there was no discrepancy between the documents and the detained goods, and the Part B of the E-way bill was duly filled and produced before the authority. The revenue did not establish any intention on the petitioner's part to evade tax. Citing precedents, the court emphasized that technical errors without intent to evade tax do not warrant penalties under Section 129(3) of the Act. Relying on judgments in similar cases, the court quashed the impugned orders and directed the return of security to the petitioner within six weeks.

In conclusion, the court found that the impugned orders were unsustainable in light of the facts and legal precedents cited. The writ petition was allowed, and any amount deposited by the petitioner pursuant to the impugned orders was directed to be refunded within a month.