E-way bill expired due to vehicle break down only a technical breach and non extension of its time period cannot be ground for penalty under UPGST Act 2017
In a recent judgment, Hon’ble Allahabad High Court has held that E-way bill expired due to vehicle break down is only a technical breach and not extending time period of the e-way bill cannot be sole ground for penalty u/s 129(3) of UPGST Act 2017
ABCAUS Case Law Citation:
ABCAUS 4018 (2024) (05) HC
Important Case Laws relied upon:
M/s Falguni Steels v. State of U.P. and Others
In the instant case, a writ petition was filed by the petitioner challenging the order passed by the GST Authorities imposing tax and penalty under Section 129(3) of the Uttar Pradesh Goods and Services Act, 2017 (the Act) and order passed in the appeal.
The petitioner submitted that the tax invoice and the e-way bill were accompanying the vehicle carrying the goods. He further submitted that goods were in order and matched the invoices and e-way bill and the only defect was that the e-way bill had expired nine hours and thirty minutes prior to interception.
It was submitted that the explanation for the delay given by the petitioner was that the vehicle has broken down due to the same there had been delay in transportation. However, without consideration of the cause of delay, the authorities imposed the impugned penalty.
On the contrary, the GST authorities submitted that in the event the e-way bill expired, there is a provision in the portal that allows the transporter/consignor/consignee to seek extension of the e-way bill. Such extension was not carried out by the petitioner, and therefore, the contravention of the Rules has taken place and the penalty imposed under the Act was in order and is required to be sustained.
The Hon’ble High Court observed that in a recent case, it had held that mens rea to evade tax is essential for imposition of penalty. Whereas, the factual aspect in the present case clearly did not indicate any mens rea whatsoever for evasion of tax.
The Hon’ble High Court observed that the goods were accompanied by the relevant documents and the explanation of the petitioner with regard to slow movement of the goods clearly indicated that the truck had broken down resulting in delay. This factual aspect should have been considered by the authorities below. The breach committed by the petitioner with respect to not extending time period of the e-way bill is only a technical breach and it cannot be the sole ground for penalty order being passed under Section 129(3) of Act.
The Hon’ble High Court opined that the finding of the authorities with regard to intention to evade tax is not supported by the factual matrix of the case, and accordingly, the impugned order passed by the Assistant Commissioner and the appellate order passed by the Additional Commissioner were quashed and set aside.
The GST authorities were directed to refund the amount of tax and penalty deposited by the petitioner within a period of four weeks.
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