23.08.2022: Tax, Penalty Not To Be Imposed Under Section 129 In Case Of Bonafide Mistakes – E-Way Bill – Allahabad High Court

Allahabad High CourtThe Hon’ble High Court of Allahabad vide its order dated 05.08.2022 in the matter of M/s Shanu Events Vs. State of UP and 2 Others in Writ Tax No. – 258 of 2022, set aside the order imposing tax & penalty for inadvertent error in applying for e-way bill and ordered for refund of amount of security & penalty that may have been deposited by the petitioner/asssessee.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the appellate authority order dated 05.03.2021 in Appeal No. 05/2021 for A.Y. 2020-21, passed under Section 129(3) of the U.P.G.S.T. Act, 2017, where by the appeal filed by the petitioner was dismissed by the first appellate authority and the order dated 28.12.2020 imposing tax amounting to Rs. 2,16,000/- and equivalent penalty, totalling Rs. 4,32,000/- was confirmed against the petitioner.

The writ petition was entertained as no tribunal has been constituted till date.

Held: –

  • The Hon’ble Court after considering the submissions made and facts of the case found that there is no dispute to the fact that the petitioner is an event management firm having its head office at Katni, Madhya. It is also not disputed that the petitioner was awarded some contract at Kumbh Mela, Haridwar, for which it was transporting LED panels on truck bearing registration no. HR- 55-V-5014.
  • However, while the goods were in transit through State of U.P., the vehicle was stopped for inspection and it was found that the accompanied e-way bill disclosed the transportation of LED panels from the petitioner’s place of business at Katni to the petitioner’s other place of business at Haridwar, Uttarakhand.
  • The Hon’ble Court after the perusal of e-way bill found that the petitioner made an inadvertent error in applying for e-way bill as after the place of shipment to ‘Kumbh Mela, Haridwar’ the words ‘Madhya Pradesh – 483501’ was mentioned.
  • That due to wrong filling up of the address and the pin code of ‘Katni, Madhya Pradesh’, the software auto-generated the field as 100 Kms instead of 1000 Kms and generated the validity period of the e-way bill to one day. Thus, the said e-way bill expired on 24.12.2020, and solely on that ground, the goods were seized and the tax & penalty was demanded.
  • With the above, it was found by the Hon’ble Court that there is no doubt about the genuineness of the explanation advanced on the behalf of the petitioner, and the mistake was inadvertent. That once the place of shipment has been mentioned as Haridwar, Uttarakhand, there was no occasion to fill up the place of destination as Madhya Pradesh with the pin code of Katni. Therefore, clearly the mistake was bonafide.
  • Further it was found that in absence of any allegation or material found substantiating ill-intent on the part of the assessee, to transport the goods for sale, the imposition of tax & penalty is wholly unsustainable. Moreover, the goods are old and the breach was technical not real.

The Hon’ble Court with the above findings set aside the impugned order dated 28.12.2020 passed under Section 129(3) and the appeal order dated 05.03.2021. It was directed to return the amount of tax and penalty that may have been deposited by the petitioner, in accordance with law.

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