Penalty orders to be quashed, imposed for not generating an e-tax invoice due to a bona fide mistake

Facts of the case: In this case, the petitioner is a dealer who was transporting goods with accompanying documents such as tax invoice, GRs, and e-way bills. The goods were detained on the grounds that the petitioner did not generate an e-tax invoice as required by Rule 48 of the GST Rules, 2017. Penalty order u/s 129 was also passed.  It was argued that under Rule 138A, there is no requirement for carrying an e-tax invoice, and all necessary documents were present. The petitioner also contended that the turnover threshold for generating an e-tax invoice was recently reduced from 20 crores to 10 crores, which caused a bona fide mistake due to unawareness of the change.  

Held that: The Allahabad High Court in this case quashed the penalty orders imposed on the petitioner for not generating an e-tax invoice due to a bona fide mistake. It was noted that all other required documents under Rule 138A were present and there was no intent to evade tax. The proceedings under Section 129(3) of the GST Act were deemed unjustified in the absence of any finding of mens rea. The court ordered the refund of any amount deposited by the petitioner during the proceedings. 

To read the complete judgment 2024 taxo.online 1509