The Hon’ble High Court of Allahabad vide its order dated 06.09.2022 in the matter of M/s Citykart Retail Pvt. Ltd. Vs. Commissioner of Commercial Tax U.P. Gomti Nagar LKO and Anr. in Writ C No. – 22285 of 2019, finding that the Part – B of the E-way could not be filled due to flaws on the portal and there is no allegation that the goods were being transported without payment of tax, set aside the orders passed for detention of the vehicle on the ground of not filling the Part -B of the E-way Bill,

The Petitioner filed the writ petition before the Hon’ble High Court challenging the demand/penalty order dated 18.04.2018 as well as the appellate order dated 14.05.2019 passed by the Respondent authorities.  It was also prayed and directions were sought to refund the amount of penalty deposited by the petitioner.

Facts of the Case: –

• That the petitioner is a company engaged in the business of Trading of Ready-made Garments and is registered with UPGST and VAT Act, 2008.
• That on 17.04.2018, the vehicle of the petitioner carrying the goods was inspected at Auraiya, U.P., which were being transported from Gurgaon, Haryana to Rae Bareli, U.P. It was found at the time of inspection that E-way bill was incomplete as Part – B of the E-way was not available.
• Consequently, the vehicle was detained for verification and later the mobile squad seized the goods and issued a show cause notice, which was duly replied by the Petitioner.

Petitioner’s Submissions: –

• It was submitted on the behalf of the petitioner that the vehicle number i.e., DL01M6498, could not be entered due to some technical error in the Part -B of the E-way Bill, which led to the seizure of the goods.
• That a circular dated 18.03.2018 was issued, clarifying with respect to technical glitch arising out of the number plates bearing Delhi number and it was advised that while filling the form, it should be filled in a particular manner as the form which accepts the e-way bill does not have any provision for zero to be mentioned. Thus, it was submitted that the error in not filing the Part – B was on account of the technical glitch and same was acknowledged by the department who issued the said circular dated 18.03.2018.
• Further there is no intent to avoid the payment of duty and the same has not been alleged or there is no finding against the petitioner showing intent to evade the payment of duty. However, the petitioner has already paid the tax (Rs. 1,36,300/-) & equivalent penalty demanded and got the goods released.
• It was submitted that despite the fact said circular was furnished before the appellate authority, while deciding the appeal the circular (issued by Ministry of Finance or Clarificatory Circular) was not considered and the appeal filed by the petitioner was dismissed.
• That reliance was also placed on another circular dated 14.09.2018 issued by Ministry of Finance, to submit that Section 129 of the CGST Act, should not be invoked in case of minor errors.
• Further reliance was placed on the decision of this Court in VSL Alloys India Pvt. Ltd. vs. State of U.P. and another (Writ Tax No.637 of 2018), wherein the similar issue was dealt with by the Hon’ble Court and seizure order was set aside.
• Lastly, in view of the above submissions it was submitted that the impugned order demanding tax and imposing penalty upon the petitioner is bad in law and is liable to set aside.

On the other hand, the impugned order was defended on the behalf of the respondents and it was submitted that the contention of the petitioner that the Part – B of the E-way Bill was not filled due to technical glitch, is liable to be rejected.

Held: –

• The Hon’ble Court after considering the submissions made and the facts of the case, found that the only allegation on which the goods were seized was that Part – B of the E-way Bill was not filled up and there is no allegation that the goods in question were being transported without the payment of tax.
• Further it was found that the submissions/explanations made by the petitioner for not filing the Part – B of the E-way Bill, is clearly supported by the Circulars issued by the Ministry of Finance wherein the problem arising in filling the part – B of E-way Bill was noticed and advisories were issued.
• Lastly, it was found by the Hon’ble Court that in the present matter no intent to evade the duty could be ascertained against the petitioner, as the vehicle in the which the goods were being transported on a Delhi number. Moreover, the issue involved in the present matter is covered with the decision of this Court in VSL Alloys India Pvt. Ltd. vs. State of U.P. and another, wherein the similar situation was dealt with by this Court.

The Hon’ble Court with the above findings set aside the impugned order dated 18.04.2018 and the appellate order dated 14.05.2019 and allowed the writ petition, with the directions to the respondent authorities to refund the amount collected and paid by the petitioner in pursuance to the impugned order within a period of two months from today.