Penalty not leviable due to expiry of E-way bill when there is no intention to evade payment of tax

[CA Bimal Jain]

The Hon’ble Allahabad High Court in M/S RAGHUVEER ISPAT PRIVATE LIMITED VERSUS STATE OF U.P. AND 2 OTHERS - 2024 (5) TMI 1399 - ALLAHABAD HIGH COURT, allowed the writ petition and set aside the order imposing penalty under Section 129(3) of the Central Goods and Services Tax Act (“the CGST Act”) on the ground that e-way bill expired during the course of transportation of goods. The Hon’ble High Court also directed the Revenue department to refund the amount of tax and penalty deposited by the Assessee within four weeks from the date of the order.

Facts:

M/s. Raghuveer Ispat Private Limited (“the Petitioner”), filed writ Petition challenging the penalty and appellate order dated December 09, 2017 and May 08, 2019 (“the Impugned Orders”) passed under Sections 129(3) and 107 of the Uttar Pradesh Goods and Services Tax Act, 2017 (“the UPGST Act”) on the ground that transportation of goods had taken place based on expired e-way bill. The Petitioner argued that the only discrepancy that existed was e-way bill issued in relation to transportation of goods was expired. Also, it was contended that the goods were accompanied by relevant documents and were as per invoice description. It was further submitted that e-way bill expired due to the delay caused during transportation by the vehicle’s engine failure. The Petitioner also relied upon the judgment of Hon’ble Allahabad High Court in the case of M/S GLOBE PANEL INDUSTRIES INDIA PVT. LTD. VERSUS STATE OF U.P. AND OTHERS - 2024 (2) TMI 363 - ALLAHABAD HIGH COURT wherein it was held that the penalty should not be imposed due to technical violation when there was no intention to evade payment of tax.

Held:

The Hon’ble Allahabad High Court in M/S RAGHUVEER ISPAT PRIVATE LIMITED VERSUS STATE OF U.P. AND 2 OTHERS - 2024 (5) TMI 1399 - ALLAHABAD HIGH COURT, accepted the submissions made by the Petitioner and held that, the Impugned Orders are liable to be set aside and thereafter, refund the amount of tax and penalty deposited by the Petitioner within four weeks from the date of the order. Hence, the writ petition was allowed.

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