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2025 (1) TMI 1311 - HC - GSTImposition of a penalty under Section 129 of the Act - petitioner had produced the e-way bill before the passing of the seizure order - intent to evade tax present or not - HELD THAT - Once the e-way bill was produced before passing of the seizure order it could not be said that there was any contravention of the provisions of the Act being made by the petitioner. This Court on various occasions have held that if the requisite documents which were not accompanying with the goods were produced before passing the seizure order and if there were no intention to avoid the legitimate tax the levy of penalty was not justified. This Court in the case of M/S BANS STEEL THROUGH ITS PROPRIETOR ALPANA JAIN VERSUS STATE OF U.P. AND 2 OTHERS 2024 (8) TMI 772 - ALLAHABAD HIGH COURT has held that It is not in dispute that before the seizure order could be passed proper E-way bill was produced and the authorities at no stage have pointed out any discrepancy in the said E-way bill. Once the E-way bill was produced before the seizure order could be passed the discrepancy if any was cured. Petition allowed.
ISSUES PRESENTED and CONSIDERED
The core legal issue in this case was whether the imposition of a penalty under Section 129 of the Act was justified when the petitioner had produced the e-way bill before the passing of the seizure order. The Court needed to consider whether the authorities acted correctly in treating the e-way bill as an afterthought and whether there was an intention to evade tax. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents: The legal framework revolves around the provisions of Section 129 of the Act, which deals with the detention, seizure, and release of goods and conveyances in transit. The case also referenced previous judgments, notably M/s Bans Steel and M/s Akhilesh Traders, which provided guidance on handling situations where e-way bills are produced after the interception of goods. Court's Interpretation and Reasoning: The Court noted that the petitioner had produced the e-way bill before the seizure order was passed. The authorities had not identified any discrepancies in the e-way bill, nor had they recorded any finding that the petitioner intended to evade tax. The Court emphasized that the mere absence of an e-way bill at the time of interception does not automatically imply an intention to evade tax if the document is produced before the seizure order. Key Evidence and Findings: The petitioner provided evidence that the e-way bill was generated and available before the seizure order. The penalty order and the appellate authority's affirmation did not consider this evidence adequately. The Court found that no defects were pointed out in the e-way bill by the authorities during any stage of the proceedings. Application of Law to Facts: Applying the legal principles from previous judgments, the Court concluded that since the e-way bill was produced before the seizure order, the authorities should not have imposed a penalty. The production of the e-way bill before the seizure order indicated compliance with the law, and there was no evidence of intent to evade tax. Treatment of Competing Arguments: The petitioner's argument was that the e-way bill was produced in time, and there was no intention to evade tax. The respondent's argument was that the absence of the e-way bill at the time of interception suggested an attempt to avoid tax. The Court found the petitioner's argument more compelling, supported by the timely production of the e-way bill and the lack of any identified discrepancies. Conclusions: The Court concluded that the imposition of the penalty was unjustified as the petitioner had complied with the legal requirements by producing the e-way bill before the seizure order. The authorities' decision to treat the e-way bill as an afterthought was not supported by any findings of an intention to evade tax. SIGNIFICANT HOLDINGS The Court held that the impugned orders could not be justified under the law and were therefore quashed. The judgment reinforced the principle that if requisite documents are produced before the seizure order and there is no intention to evade tax, the levy of a penalty is not justified. The Court stated, "Once the e-way bill was produced before passing of the seizure order, it could not be said that there was any contravention of the provisions of the Act being made by the petitioner." The final determination was that the writ petition succeeded, and the orders imposing penalties were quashed. The Court ordered that any amount deposited by the petitioner should be refunded in accordance with the law.
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