2024 (1) TMI 1107 - HC - GST

Levy of Penalty order u/s 129(3) of the Uttar Pradesh Goods and Service Tax Act, 2017 - evasion of tax - Quantum of penalty - HELD THAT - It is found that neither in the show cause notice nor in the order under Section 129(3) there was any allegation that non downloading of E-way Bill-02 was done with intention to evade tax. In spite of the same, the respondent authorities have chosen to impose maximum penalty whereas the law provides for lesser penalty under Section 122 of the Act. No case is made out with regard to evasion of tax. The impugned order dated December 23, 2018 and the order dated January 10, 2018 are quashed and set-aside - Petition allowed.

Summary

Issues involved: Challenge to penalty order u/s 129(3) of the Uttar Pradesh Goods and Service Tax Act, 2017 based on changes in notifications leading to confusion and non-compliance with e-way bill provisions.

Summary:
1. Challenge to Penalty Order: The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the penalty order u/s 129(3) of the Uttar Pradesh Goods and Service Tax Act, 2017. The petitioner assailed the order dated December 23, 2018, passed by the respondent No.4 in appeal, which was related to an earlier penalty order issued on January 10, 2018.

2. Legislative Changes and Compliance: The petitioner's counsel referred to a Division Bench judgment highlighting the confusion caused by successive changes in notifications during the relevant period. The judgment emphasized that the authorities failed to track the changes adequately, leading to incorrect imposition of penalties based on outdated provisions. The court observed that there was a lack of clarity due to rapid changes in relevant provisions, resulting in erroneous actions by the authorities.

3. Detention of Goods and Allegations: The petitioner contended that the goods were detained after completion of the journey from the purchaser's premises. It was noted that there were no allegations of intentional tax evasion related to non-downloading of E-way Bill-02 in the show cause notice or the penalty order u/s 129(3).

4. Judicial Precedents and Relief Granted: The court cited similar Division Bench judgments to support the petitioner's case and concluded that there was no evidence of tax evasion. Consequently, the court quashed and set aside the impugned orders dated December 23, 2018, and January 10, 2018, granting relief to the petitioner.

In conclusion, the court's decision was based on the lack of intentional tax evasion, the confusion caused by legislative changes, and the disproportionate penalty imposed by the authorities, leading to the quashing of the penalty order and providing relief to the petitioner.