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IN THE HIGH COURT OF ALLAHABAD
PIYUSH AGRAWAL, J.
M/S Balaji Traders And Another - Petitioners
Versus
State of U.P. And 2 Others - Respondents
WRIT TAX NO. 784 OF 2023.
Decided On : 06-10-2023
| Table of Content |
|---|
| 1. gst tribunal not constituted in u.p. (Para 2 , 3) |
| 2. petitioners' factual background. (Para 4) |
| 3. petitioners argue lack of intent to evade tax. (Para 5) |
| 4. respondents support penalty due to document absence. (Para 6) |
| 5. interception of goods without checking. (Para 8 , 9 , 10) |
| 6. intent to evade tax necessary for penalties. (Para 12) |
| 7. court quashes penalties under section 129. (Para 13) |
| 8. outcome of the writ petition based on legal precedents. (Para 14) |
| 9. writ petition allowed; orders quashed. (Para 15 , 16) |
| 10. cost and refund ordered. (Para 17 , 18 , 19 , 20) |
JUDGMENT
Piyush Agrawal, J.
Heard Shri Abhishek Bhushan, learned counsel for the petitioner and Shri Rishi Kumar, learned Additional Chief Standing Counsel for the State - respondents.
2. The instant Writ Tax is being entertained in view of the fact that no GST Tribunal has been constituted in the State of Uttar Pradesh pursuant to the notification of the Central Government bearing number CG-DL-E-14092023-248743 dated 14.09.2023.
3. The present writ petition has been filed assailing the impugned order 25.11.2022 affirming the penalty order under section 129(1) of the UPGST Act passed by the respondent no. 2 as well as the impugned order dated 24.03.2023 passed by the respondent no. 3 rejecting the appeal of the petitioner. A further prayer has also been made for a direction to refund the entire penalty amount of Rs. 5,58,286/- to the petitioner along with interest at the rate of 8% per month.
4. Brief facts of the case are that the petitioner no. 1 is a registered firm having GSTN No. 09AIPPJ5474K1ZX. The petitioner - firm is engaged in the business of trading cigarette, pan-masala & food spices. In its normal course of business, the petitioner received an order of supply from one Vaishya Distributors, Nashik (Maharashtra). In pursuance thereof, invoice no. 1406 dated 18.11.2022 was generated. The goods were supposed to be sent through railway. The goods were intercepted on 18.11.2022 outside the railway station, which were loaded in e-rickshaw and confiscated by the GST officials. Thereafter, on 19.11.2022, a show cause notice was issued to the petitioner - firm imposing a penalty of Rs. 5,58,286/-. The petitioner submitted reply to the show cause notice and also deposited a penalty amount; whereupon, the goods were released. The Assistant Commissioner passed the impugned order dated 25.11.2022 confirming the penalty under section 129(1) of the SGST Act. Aggrieved by the said order, the petitioner preferred an appeal, which was also dismissed vide order dated 24.03.2023 confirming the order dated 25.11.2022. Hence, this writ petition.
5. Learned counsel for the petitioners submits that on receipt of the purchase order form Nashik, Maharashtra, tax invoice was raised, but the e-way bill could not be generated as there was some technical glitch. He further submits that for filling up the e-way bill, Railway Receipt number was required and therefore, on 18.11.2022, in the evening, the petitioner went to the Kanpur Railway Station for arranging the entire booking process and to obtain Railway Receipt number for generating the e-way bill and asked the e-rickshaw driver to wait outside the railway station itself. When the goods were intercepted, the e-rickshaw driver duly informed to the GST authorities that the owner of the goods, along with paper, is inside the railway station for getting the Railway Receipt prepared, but without waiting or cross-checking the said fact, the respondent - authorities not only confiscated the goods, but also issued show cause notice on 24.11.2022. He further submits that a detailed reply was given by the petitioners narrating the said facts, but without considering the same, the impugned penalty order has been passed. He further submits that there was no intention of the petitioner to evade payment of tax and the authorities could have released the goods as there was no intention of the petitioner to evade payment of tax. He fur
Intention to evade tax is a prerequisite for imposing penalties under GST Act; mere technical issues should not warrant such penalties.
For imposition of penalties under the GST Act, intent to evade tax must be established; mere expiration of documents does not suffice.
Intent to evade tax is a necessary condition for proceedings under Sections 129 and 130 of the CGST Act; absence of such intent invalidates penalties imposed under these sections.
For proceedings under section 129 of the UPGST Act, there must be intent to evade tax established; a mere technical breach does not warrant penalties.
Minor documentation discrepancies do not imply intent to evade tax, and valid transport documents render penalty imposition inappropriate.
Minor procedural lapses in compliance with tax regulations should not attract severe penalties, especially when there is no intent to evade tax.
Procedural compliance in tax documentation is mandatory; failure to fill an e-way bill's section warrants penalty under tax law.
Penalties should be reserved for cases where there is a demonstrated actual intent to evade tax, and technical errors without potential financial implications should not be grounds for imposition of ....
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