2024 (12) TMI 209 - HC - GST

Levy of penalty u/s 129 (3) of the CGST / SGST Acts - E-invoice was not generated - HELD THAT - The objection raised by the learned Government Pleader that the petitioner has an effective alternative remedy by way of appeal and quash Ext.P16 order permitting the competent officer to impose penalty in terms of provisions contained in Section 122 of the CGST / SGST Acts also keeping in mind the provisions of Section 126 of the CGST / SGST Act, is overruled. Any amount that has been collected from the petitioner towards the amount payable by the petitioner in terms of Ext.P16 shall be refunded to the petitioner after fresh orders are passed by the competent authority. Petition disposed off.

Summary

Issues:
Challenge to penalty under Section 129 of CGST/SGST Acts for failure to generate E-invoice.

Analysis:
The petitioner challenged the penalty imposed under Section 129 of the CGST/SGST Acts, contending that the only defect was the non-generation of an E-invoice. It was argued that the goods were accompanied by E-way Bill and invoices, with no allegation of tax evasion. The petitioner argued that if any penalty were to be imposed, it should be under Section 122, considering the provisions of Section 126. Reference was made to a previous judgment supporting this argument.

Maintainability of Writ Petition:
The Government Pleader objected to the maintainability of the writ petition, citing the availability of an appeal under Section 107 of the CGST/SGST Acts as an effective alternative remedy. It was contended that the non-generation of the E-invoice was a clear violation of the law, as per the counter affidavit. The Government Pleader highlighted the requirement to generate E-invoices as per the relevant notification and rules, emphasizing that the failure to comply led to the initiation of penal proceedings under Section 129.

Court's Decision:
After hearing both parties, the court found in favor of the petitioner, citing a previous judgment that penalties under Section 129 should be reserved for cases involving tax evasion or intentional violations. The court quashed the order imposing the penalty under Section 129 and directed the competent authority to consider penalties under Section 122 and Section 126 instead. Any amount collected from the petitioner was to be refunded. The court overruled the objection regarding the availability of an alternative remedy through appeal, emphasizing the specific circumstances of the case and the legal justifications provided. The writ petition was disposed of accordingly.