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High Court of Madhya Pradesh
Sujoy Paul, Prakash Chandra Gupta, JJ.
M/s DAYA SHANKER SINGH, DINDORI – APPELLANT
Versus
STATE OF MADHYA PRADESH & ORS. – RESPONDENTS
W. P. No. 12324 of 2022
Decided On : 10-08-2022
E-Way Bill - GST Penalty - Central Goods and Services Act - [Section 68, Rule 138-A] - The court discussed the validity of the E-Way Bill, the principles of natural justice, and the proportionality of the penalty imposed under the GST Act. It referenced judgments from Telangana High Court and Calcutta High Court, highlighting the lack of evidence of tax evasion, fraudulent intent, or negligence on the part of the petitioner. The court emphasized the statutory recognition of natural justice and the legislative mandate for proportionate punishment.
Fact of the Case:
The petitioner, a registered Government contractor, faced penalty under the GST Act for the expiry of the E-Way Bill during the transportation of goods. The petitioner argued that the penalty was disproportionate and unwarranted, citing lack of fraudulent intent or negligence.
Finding of the Court:
The court found that there was no evidence of tax evasion, fraudulent intent, or negligence on the part of the petitioner. It emphasized the statutory recognition of natural justice and the legislative mandate for proportionate punishment.
Issues: Validity of penalty under the GST Act, principles of natural justice, proportionality of punishment.
Ratio Decidendi: The court held that the penalty imposed was disproportionate and unwarranted, considering the lack of evidence of tax evasion, fraudulent intent, or negligence. It emphasized the statutory recognition of natural justice and the legislative mandate for proportionate punishment.
Final Decision: The penalty imposed by the order dated 25-5-2022 was set aside, and the amount of penalty already deposited by the petitioner was ordered to be refunded within 30 days with 6% interest till the time of actual payment.
ORDER SUJOY PAUL, J. : – This petition filed under Article 226 of the Constitution of India takes exception to the notice dated 25-5-2022 (Annexure-P/10) and another order of same date (Annexure-P/11).
2. In short, the case of petitioner is that petitioner is a registered Government contractor and registered dealer holding Goods and Service Tax Identification No as 23BDRPS9015A1ZK.
3. The petitioner received a work order from Divisional Project Engineer of Public Works Department (PIU), Dindori for construction of additional laboratory and class room at Chandravijay College, Dindori. This work order dated 21-4-2022 is filed by petitioner as Annexure P/1.
4. The petitioner received quotation (Annexure-P/2) from Mittal Steels for supply of TMT bars. In turn, petitioner placed order to Mittal Steels, Raipur for supply of TMT bars.
5. Mittal Steels in furtherance of petitioner’s order/demand raised commercial invoice on 17-5-2022 (Annexure-P/3) charging IGST @ 18% i.e. Rs. 3,41,011.37/-.
6. Mittal Steels being supplier of goods in compliance of section 68 of the Central Goods and Services act R/W Rule 138-A generated an E-Way Bill for movement of goods from Raipur to Dindori on 17-5-2022 on 06:08 PM. The E-Way Bill No. 8212 2755 0219 is filed as Annexure-P/4.
7. The vehicle which was carrying TMT bars on 18-5-2022 and was travelling from Raipur to Dindori suffered a problem and clutch-plates of vehicle got damaged. The proprietor of ‘Maa Rewa Transport’ sent a vehicle for servicing to ‘Rama Moto Cooperation’, Raipur on 18-5-2022. Copy of Customer Job Card is filed as Annexure-P/5.
8. On 19-5-2022, the vehicle bearing No. CG04MW3477 got repaired and tax invoice raised for changing parts is filed as Annexure-P/6. The vehicle after getting gate pass, started movement with related documents from Raipur to Dindori . The gate pass is also placed on record as Annexure-P/7.
9. It is averred in the petition that said vehicle reached Dindori on 19-5-2022 between 10.30 to 10.45 pm well within the time mentioned in the E-Way Bill. After reaching the destination, i.e. Dindori, the truck driver called the petitioner and informed that the truck has reached the destination. The petitioner told the truck driver to take the vehicle to Weigh Bridge. While the vehicle was moving towards Weigh Bridge, the Assistant Commissioner at 4.35 AM on 20-5-2022 stopped the vehicle and demanded the relevant documents. The truck driver produced all the relevant documents necessary for the purpose of transportation. The Assistant Commissioner was satisfied by all the documents produced by truck driver except the Eway Bill. The Assistant Commissioner opined that E-way Bill got expired on 19-5-2022 at 12:00 AM. The repeated requests of truck driver and transporter to Assistant Commissioner that the goods reached Dindori before 12:00 AM and unintentional delay occurred thereafter went in vain. The Assistant Commissioner issued FORM GST MOV-02 stating that E-way Bill got expired. The vehicle was detained in the custody of the City Police Station, Dindori.
10. The petitioner submitted his written reply on 24-5-2022, (Annexure P/9) and requested that material detained be supplied to him which is necessary for construction of the class room and laboratory. The said written submission was not accepted and FORM GST MOV-06 was issued. The same was followed by GST FORM MOV-07 specifying the penalty amount of Rs. 6,82,030.00, (Annexure P/11).
11. Criticizing the impugned notice and order Shri Abhishek Dhyani, learned counsel for the petitioner urged that proceedings initiated under section 29 of the GST Act were not justifiable. The respondents have not followed the principles of natural justice, which is part of statutory requirement of section 126 of the said Act which clearly provides that no penalty should be imposed for ‘minor breaches’ or procedural requirements or omission etc. The petitioner was not found guilty of any fraudulent intent or gross negligence. Thus, impo
The main legal point established in the judgment is the requirement for proportionate punishment under the GST Act, emphasizing the lack of evidence of tax evasion, fraudulent intent, or negligence.
The expiration of an e-way bill during transit, without any intent to evade tax, does not justify severe penalties under the CGST Act; penalties must be proportionate to the offense committed.
The imposition of penalties for minor discrepancies in tax-related documents without intent to evade tax is not justified under the CGST/SGST Acts.
For imposition of penalties under the GST Act, intent to evade tax must be established; mere expiration of documents does not suffice.
Expiration of an e-Way Bill during transit does not invoke penalties under Section 129 without evidence of intent to evade taxes.
A penalty under Section 129(3) of the Act requires proof of mens rea for tax evasion, which was absent in this case, leading to the quashing of the penalty orders.
The imposition of penalties under tax laws requires clear evidence of intent to evade tax, and procedural fairness must be upheld in enforcement actions.
Technical violations without intent to evade tax do not justify penalties under the Uttar Pradesh Goods and Services Tax Act.
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