The Hon’ble High Court of Allahabad vide its order dated 31.01.2023 in the matter of BL Agro Oils Ltd. Vs. State of U.P. in Writ C No. – 31593 of 2019, held that it is for the seizing/assessing authority to establish by evidence that the e-way bill has been reused.  The onus is on the assessing/seizing authority to prove that there is reuse of e-way bill.  It was also found that no such evidence has been brought on record to support the said stand of the department resulting in interception of goods.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the order dated 31.10.2017 passed by Assistant Commissioner, Commercial Tax, Mobile Squad, Unit-1, Lucknow, whereby tax and penalty has been imposed upon the petitioner.  The challenge was also made to the order dated 23.08.1019 passed by Additional Commissioner Grade-2 (Appeal-I), Commercial Tax, Lucknow, whereby his appeal was rejected.

Facts of the Case: –

• On 28.10.2017, a transport vehicle carrying goods of the petitioner was intercepted and a seizure order was passed against the petitioner on the ground that the e-way bill 23.10.2017 and the invoice bore a packing date of 26.10.2017 and, hence, the documents do not relate to the goods intercepted.
• Further, in terms of the Circular No.102/1718024 issued by the Commissioner, validity of the e-way bill was up to 4 days and goods were being transported after 4 days.
• The petitioner submitted its reply responding to the above, it was stated that while under the transportation earlier, the goods were damaged on the way and oil contained therein spilled over other packaging. Thus, the same were brought back and properly packed goods were supplied through the same invoice and e-way bill.
• That On 31.10.2017, a tax liability and penalty at the rate of 5% totalling Rs. 62,500/- under Section 129(3) of the U.P. Goods and Services Tax Act, 2017 was imposed on the petitioner. In pursuance of which, the petitioner deposited the said amount under protest and got the goods released, and thereafter, transported the same to the purchasers.
• Being aggrieved, the petitioner filed an appeal before the appellate authority challenging the penalty order, however, the said appeal was also rejected by an order dated 23.08.2019.

It was submitted on the behalf of the Petitioner that it is the duty of the taxing authority to prove by positive evidence that e-way bill was being reused.  Since the said part is never proved, the tax and penalty could not be imposed upon the petitioner.  To Support its stand, reliance was placed on the judgment of M/s Anandeshwar Traders Vs. State of U.P. and Others reported in 2021 U.P.T.C. [Vol. 107]-421, wherein it was held that ‘As such it was open to the seizing authority to make all fact inquiries and ascertain on that basis whether the goods had or had not been transported pursuant to the e-way bills generated on 24.11.2019. Since the petitioner-assessee had pleaded a negative fact, the initial onus was on the assessing authority to lead positive evidence to establish that the goods had been transported on an earlier occasion.’

‘Mere assertion made at the end of the seizure order that it was clearly established that the assessee had made double use of the e-way bills is merely a conclusion drawn bereft of material on record. It is the reason based on facts and evidence found by the assessing authority that has to be examined to test the correctness of the order and not the conclusions, recorded without any material on record.’

The Hon’ble High Court finding that the case of the petitioner is squarely covered with the above judgment, held that it is for the seizing authority to establish by evidence that e-way bill was being reused. In the present case, there is no evidence produced by the seizing authority that there is a reuse of the e-way bill by the petitioner.

With the above findings, the Hon’ble Court allowed the writ petition and set aside the impugned orders dated 31.10.2017 and 23.08.2019.