The Allahabad High Court in the case of M/S AKHILESH TRADERS VERSUS STATE OF U.P. AND 3 OTHERS vide Writ Tax No. – 1109 of 2019 dated 20.02.2024, has held that non-accompanying of invoice and e-way bill with the transportation of goods, cannot be treated to be a mere technical or typographical mistake, and accordingly, in such cases, the burden of proof for establishing that there was no mens rea for evasion of taxes shifts to the assessee.
In this case. the goods were intercepted and upon interception, no E-Way Bill, invoice and bility were present in the vehicle carrying the goods. Subsequent to the interception, these documents were produced by the assessee. The department imposed penalty under Section 129(3) of the Act. The Petitioner challenged the the penalty imposed by the Assistant Commissioner, Commercial Tax, under Section 129(3) of the Act. The Petitioner placed reliance earlier court's judgments in the case of M/s Axpress Logistics India Private Limited v. Union of India and others (Writ Tax No.602 of 2018 decided on April 9, 2018) and M/s Modern Traders v. State of U.P. and others (Writ Tax No.763 of 2018 decided on May 9, 2018), to argue that when the documents are produced after the interception and before the detention order is passed, no penalty is leviable under Section 129(3) of the Act.
The Department contended that post-April 2018, the E-Way Bill is mandatory, and its absence, along with invoices, constitutes a significant violation. Further, in instances of detention that occurred subsequent to April 2018, the E-Way Bill is mandatory and is required to be carried along with the goods. However, in the present case, neither the E-Way Bill nor even invoice and bility were accompanying the goods at the time of interception. He, accordingly, submits that the burden of proof with regard to intention to evade tax shifts from the Department to the assessee.
The Court observed that in the aforementioned cases where penalties were being imposed under Section 129 of the Act though held that an intention to evade tax should be present, however, in the event the goods are not accompanied by the invoice or the e-way bill, a presumption may be raised that there is an intention to evade tax. Such a presumption of evasion of tax then becomes rebuttable by the materials to be provided by the owner/transporter of the goods.
The Court held that the facts are undisputed that neither invoice nor E-Way Bill were accompanying the goods. Such a contravention to the Rules cannot be treated to be a mere technical or typographical mistake, and accordingly, in such cases, the burden of proof for establishing that there was no mens rea for evasion of taxes shifts to the assessee. Production of these documents subsequent to the interception cannot absolve the petitioner from the liability of penalty as the very purpose of imposing penalty is to act as a deterrent to persons who intend to avoid paying taxes owed to the Government. It is clear that if the goods had not been intercepted, the Government would have been out of its pocket with respect to the GST payable on the said goods.
The Court upheld the penalty imposed on the Petitioner.
The Complete judgment can be accessed at 2024 Taxo.online 343
