Penalties under GST Act require evidence of intent to evade tax; mere technical omissions do not warrant penalties when tax has been duly paid.

ORDER :

S.R.KRISHNA KUMAR, J.

1. In this petition, petitioner seeks for the following reliefs:-

A. Set aside the order dated 29.11.2024 passed by the Respondent No. 3 bearing No. ADCOM(SMR)-2/APP- 4/GST/SMR-02/2024-25 under Section 108 (1) of the KGST & CGST Act R/w Rule 109B(2) of the KGST/CGST Rules, 2017 at Annexure - A by issuing Writ of Certiorari;

B. Declare that no penalty under Section 129 of the Karnataka Goods and Service Tax Act, 2017 and Central Goods and Services Tax Act, 2017 can be levied when tax has been paid on the goods and merely on the ground that Part - B of E-Way bill is not updated by issuing a Writ of Mandamus;

C. Consequently, set aside order of the Respondent No. 2 vide bearing de G57. A.P.No. 300/23-24 order dated 18.03.2024 under Section 107(11) of the KGST and CGST Act, 2017 to the extent of levy of penalty of Rs. 25,000/- at Annexure K by issuing a Writ of Certiorari;

D. Grant any other relief in favour of the Petitioner as this Hon'ble Court deems fit in the facts and circumstances of the above case, in the interest of justice and equity.

2. Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record.

3. A perusal of the material on record will indicate that the petitioner is a transport service provider which was transporting the subject goods from Chennai to Bangalore in the subject vehicle bearing Registration No.TN-12 AK-8272, when the subject conveyance and goods were intercepted on 14.11.2023 by the respondents who conducted inspection on 15.11.2023 and passed an order of detention on 16.11.2023 and issued a notice under Section 129 (3) the KGST Act, proposing to levy penalty on the ground that Part-B of the e-way bill did not contain / mention the vehicle number at the time of interception. The petitioner having submitted a detailed reply dated 22.11.2023 specifically stating that due to oversight and inadvertence by way of a bonafide mistake and without any malafide intention to avoid / evade payment of GST, the petitioner had omitted to fill the vehicle number in Part-B of the e-way bill, the said omission may be condoned and the subject goods and vehicle be released in favour of the petitioner.

4. Subsequently, on 01.12.2023, the petitioner made a further submission offering to pay penalty under protest so as to obtain release of the goods, since there was urgency for the petitioner to supply the same to its recipient i.e., M/s.Bosch Limited, Bangalore, which was a reputed company. The said request made by the petitioner was rejected by the 1^st respondent vide order dated 02.12.2023 imposing penalty under Section 129 (3) and (6) of the KGST Act. The petitioner paid the said penalty on 08.12.2023 and also furnished a bank guarantee in favour of the respondents, who passed a release order dated 08.12.2023 and released the subject goods and vehicle in favour of the petitioner, who delivered the goods to the recipient company on 09.12.2023.

5. The petitioner challenged the aforesaid order dated 02.12.2023 by filing an appeal before the 2^nd respondent – appellate authority who passed an order dated 18.03.2024 and set aside the said order by partly allowing the appeal and directed levy of general penalty of Rs.25,000/- on the petitioner and further directed refund of the balance amount and for release of the bank guarantee submitted by the petitioner back to it expeditiously.

6. Subsequently, before the said order of the 2^nd respondent –appellate authority was implemented, the 3^rd respondent initiated suo moto revision proceedings under Section 108 of the KGST Act which was contested by the petitioner and culminated in the impugned order dated 29.11.2024 whereby the order dated 18.03.2024 of the appellate authority was set aside and the penalty order dated 02.12.2023 passed by the 1^st respondent was restored by the revisional authority. Aggrieved by the impugned order dated 29.11.2024 passed by the 3^rd respondent – revisional authority, petiti