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IN THE HIGH COURT OF
ROHIT RANJAN AGARWAL, J.
M/S Gurunanak Arecanut Traders - Appellant
Versus
Commercial Tax And Another - Respondent
WRIT TAX No. - 1177 of 2022
Decided on : 05.03.2025
(A) State Goods and Service Tax Act, 2017 - Sections 129(1), 129(3), and 107 - Challenge to detention order and penalty for non-compliance with e-way bill requirements - Petitioner, a registered dealer, transported goods without an e-way bill, leading to a penalty of Rs.90,62,400/- - Court found that the petitioner failed to rebut the presumption of tax evasion due to non-production of required documents at the time of interception. (Paras 11, 12, 13, and 14)
(B) E-way Bill - Mandatory requirement - Post amendment, carrying an e-way bill is obligatory for the movement of goods, and failure to do so raises a presumption of tax evasion. (Paras 11 and 12)
Facts of the case:
The petitioner, a registered dealer, sold Arecanut but was intercepted while transporting goods without an e-way bill, leading to a detention order and subsequent penalty.
Findings of Court:
The petitioner did not comply with the law, and the authorities acted properly in imposing the penalty.
Issues: Whether carrying an e-way bill is mandatory for the movement of goods.
Ratio Decidendi: The court ruled that the absence of an e-way bill raises a presumption of tax evasion, which the petitioner failed to rebut.
Result: Writ petition dismissed.
| Table of Content |
|---|
| 1. petitioner sold arecanut (Para 3) |
| 2. detention order without hearing (Para 4) |
| 3. misclassification of goods (Para 5) |
| 4. intention to evade tax (Para 6) |
| 5. evidence of tax evasion (Para 7) |
| 6. non-compliance with e-way bill (Para 8 , 9 , 10) |
| 7. e-way bill mandatory (Para 11 , 18) |
| 8. presumption of tax evasion (Para 12 , 13 , 14 , 15 , 16) |
| 9. writ petition dismissed (Para 17) |
JUDGMENT
Rohit Ranjan Agarwal, J.
1. Heard Ms. Pooja Talwar, learned counsel for the petitioner and Sri Arvind Kumar Mishra, learned Standing Counsel for State.
2. Through this writ petition, a challenge has been made to order dated 16.06.2022 passed by Commercial Tax Officer, Sector-3 (Mobile Squad), Etah exercising power under Section 129(1) of the State Goods and Service Tax Act, 2017 and order dated 24.06.2022 under Section 129(3) and also quashing has been sought for the demand of tax and penalty of Rs.90,62,400/- as well as appellate order dated 18.08.2022.
3. The brief facts of the case are that petitioner is a registered dealer under State Goods and Service Tax Act, 2017 (hereinafter called as “the Act of 2017”). He has sold 400 bags of Arecanut vide tax invoice dated 09.06.2022 to M/s. Jagdamba Enterprises, Nagpur which is also said to be a registered dealer in his respective State. The said Arecanut was being transported from Delhi to Nagpur, Maharastra by M/s. Ravi Goods Transport. The goods were intercepted at Mathura at 4:28 a.m. on 10.06.2022. The goods while in transit were not carrying the e-way bill. The e-way bill was generated on 10.06.2022 at 7:36 a.m. and was valid till 16.06.2022. A physical verification of consignment of goods was carried out. A detention order was passed on 16.06.2022 under Section 129(1) of the Act of 2017. On verification, it was found that the goods which were in transit is Chikni Bhuni Supari (processed Arecanut) and is taxable @ 18% and not @5% as declared by the petitioner. A show-cause notice was issued on 16.06.2022. When the show-cause notice remained unattended, respondent no. 2 on 24.06.2022 passed order under Section 129(3) of the Act of 2017 and a demand of tax and penalty of Rs.90,62,400/- was raised against the petitioner. Aggrieved by the said order, petitioner filed Writ Tax No. 933 of 2022 before the Division Bench of this Court which was dismissed on 12.07.2022 on the ground that petitioner has remedy of filing an appeal under Section 107 of the Act of 2017. Thereafter, an appeal under Section 107 of the Act was preferred by petitioner before Additional Commissioner, Grade-II (Appeal), Aligarh which was rejected by order impugned dated 18.08.2022. Hence, the present writ petition.
4. Learned counsel for the petitioner submitted that the detention order dated 16.06.2022 as well as penalty order dated 24.06.2022 have been passed without giving any opportunity of hearing. It is further submitted that first appellate authority has not applied its mind while rejecting the appeal and a non-speaking order has been passed. According to her, the person who had downloaded the e-way bill was not present at the place of detention and the driver of the vehicle had moved out without intimation to the petitioner. As soon as the driver realised the mistake and informed the petitioner about the non availability of the e-way bill, the same was downloaded without delay and produced before the authorities. Reliance has been placed upon the decision in case of M/s. Modern Traders vs. State of U.P. and 2 others, 2018 NTN 187 and decision of co-ordinate Bench in case of Axpress Logistics India Pvt. Ltd. vs. Union of India and 3 others, 2018 NTN 245 . Reliance has also been placed upon decisions rendered in Raj Iron and Building Materials vs. Union of India , 2018 UPTC 217 , M/s. Falguni Steels vs. State of U.P. and others, 2024 UPTC 221 and decision of Kerala High Court rendered in case of Asharaf Ali K.H. vs. The Assistant State Tax Officer & others, 2021 UPTC 469
5. It is next contended that the goods have been d
E-way bill is mandatory for transporting goods; failure to carry it raises a presumption of tax evasion, which must be rebutted by the transporter.
For imposition of penalties under the GST Act, intent to evade tax must be established; mere expiration of documents does not suffice.
Minor errors in e-way bills do not justify detention under Section 129 of the CGST Act if the goods are otherwise properly documented.
The absence of essential documents with intercepted goods raises a presumption of intention to evade tax, shifting the burden of proof to the assessee to rebut this presumption.
The requirement for a complete e-way bill for the transportation of goods is mandatory, and failure to comply raises a presumption of tax evasion.
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.
Intention to evade tax is a prerequisite for imposing penalties under GST Act; mere technical issues should not warrant such penalties.
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