2019 (12) TMI 995 - HC - GST

Assessment to GST - Imposition of penalty - main contention raised therein was that the notification to apply EWay bill was not made known to the assessee - HELD THAT - The notification to apply E-way bill mechanism was revised subsequently but was not notified to the assessee. In absence of information of application of E-way bill mechanism the petitioner made the transaction as per the procedure then existing with required declaration. The document in that regard were not considered by the Assessing Authority as well as by the Appellate Authority as compliance of E-way bill system was not made by the petitioner though it was not notified by the Government. The order for assessment and penalty was challenged in appeal for the aforesaid reasons. Ignorance of the judgment of a superior Court on the similar issue cannot be expected rather the appellate authority needs to be careful in future - The impugned orders are accordingly set aside with remand of the case to the Assessing Authority to examine the matter afresh in light of the law propounded by this Court. It would be without applying E-way bill mechanism. Petition disposed off.

Summary

Issues:
Challenge to order of Assistant Commissioner for assessment and penalty imposition. Applicability of E-way bill mechanism. Consideration of notifications and judgments regarding E-way bill procedure.

Analysis:
The writ petition challenges the order of the Assistant Commissioner, Commercial Tax, Mobile Squad, Gonda, dated 15.02.2018, which included assessment of G.S.T. and penalty imposition. The petitioner appealed to the Additional Commissioner Grade-2 (Appeal), Commercial Tax, Gonda, arguing that the notification for the E-way bill application was not communicated to them. Despite the government circulating the mandate for E-way bill mechanism in 2017, it was later put on hold. The revised notification regarding E-way bill was not notified to the petitioner, leading to non-compliance. The Assessing Authority and the Appellate Authority did not consider the documents provided by the petitioner, citing lack of compliance with the E-way bill system, which was not officially communicated. The petitioner challenged the assessment and penalty orders based on these grounds.

The impugned orders were also contested with reference to judgments in similar cases, specifically mentioning the judgment in Writ Tax No. 584 of 2018 (M/s Harley Foods Products Pvt. Ltd. vs. State of U.P.) dated 05.04.2018, and another judgment dated 19.11.2018 in Writ Tax No. 617 of 2018 (L.G. Electronics India Pvt. Ltd. Vs. State of U.P.). These judgments clarified that the E-way bill procedure from 1.2.2018 to 31.03.2018 was not applicable. Consequently, the impugned orders were deemed unsustainable.

The Court emphasized that the Appellate Authority should have considered the issue in light of the judgment in the case of M/s Harley Foods Products Pvt. Ltd. Ignorance of a superior Court's judgment on a similar issue was deemed unacceptable, and the appellate authority was instructed to be more cautious in the future. As a result, the impugned orders were set aside, and the case was remanded to the Assessing Authority for a fresh examination based on the legal principles established by the Court, without applying the E-way bill mechanism. The writ petition was disposed of accordingly.