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SAUMITRA DAYAL SINGH, RAJENDRA KUMAR IV
Shahil Traders – Appellant
Versus
State of U. P. – Respondent
JUDGMENT
Heard Sri Aditya Pandey learned counsel for the petitioner and Sri Ankur Agarwal learned counsel for the revenue.
2. Present petition has been filed to quash the order MOV-09 and the recovery notice GST DRC-07, both dated 16.1.2023 demanding Rs. 6,17,087/- by way of penalty under Section 129 (1)(b) of the UPGST Act, 2012 (hereinafter referred to as 'the Act'). Further prayer has been made to quash the detention order dated 07.1.2023 on GST MOV-06.
3. At the outset, Sri Pandey learned counsel for the petitioner has confined the prayer in the writ petition to release of the goods and vehicle in accordance with provisions of Section 129 (1)(a) of the Act. Prayer to quash the entire proceedings has not been pressed at this stage.
4. Briefly, petitioner claims to be a registered trader in iron scrap. It further claims to have dispatched certain goods to M/s Harshika Steel Sales against its regular tax invoice and E-way bill dated 02.1.2023, on truck bearing registration No. PB11- CQ-2981. Goods are thus claimed to have dispatched from Kanpur to Ludhiana in State of Punjab.
5. During the course of such transportation, the goods were detained by respondent No.2 on 04.1.2023. The
Intention to evade tax is a prerequisite for imposing penalties under GST Act; mere technical issues should not warrant such penalties.
Minor errors in e-way bills do not justify detention under Section 129 of the CGST Act if the goods are otherwise properly documented.
For imposition of penalties under the GST Act, intent to evade tax must be established; mere expiration of documents does not suffice.
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.
Section 129 forms part of the machinery provisions under the Act to check evasion of tax and a detention can be justified only if there is a contravention of the provisions of the Act in relation to ....
The central legal point established is that penalty should not be imposed for minor discrepancies in the E-way bill, as clarified by the circular.
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