18 Aug 2023 8:15 AM GMT
The Allahabad High Court has set aside an order under Section 129(3) of the UPGST Act 2017 by which a penalty was imposed solely on the ground that no evidence had been adduced regarding the illness of the driver and the breakdown of the vehicle.Petitioner regularly made inward supply from GAIL, Auraiya U.P. Inward supply from GAIL Auraiya U.P. was made for which two invoices dated 6.3.2023...
The Allahabad High Court has set aside an order under Section 129(3) of the UPGST Act 2017 by which a penalty was imposed solely on the ground that no evidence had been adduced regarding the illness of the driver and the breakdown of the vehicle.
Petitioner regularly made inward supply from GAIL, Auraiya U.P. Inward supply from GAIL Auraiya U.P. was made for which two invoices dated 6.3.2023 were prepared. E-way Bills were generated having validity up to 12.3.2023, and a GR was also prepared on the same day in which invoice numbers and Eway bills have specifically been mentioned.
On the way, the driver of the vehicle fell ill and could not complete the delivery before the date stipulated in the E-way Bill. The vehicle was intercepted on 13.3.2023 and Form GST MOV04 was prepared on 14.3.2023. Thereafter Form GST MOV01 was prepared on 23.3.2023 and consequently, an order was passed on the same day stating that the goods in question were being carried without proper documents as the E-way bills had expired.
Notice in From GST MOV 07 under section 129(3) of the UPGST Act was issued proposing to impose a penalty under sections 129(1)(a) and 129(1)(b) of the Act. Further, an order under section 129 (3) of the Act was passed directing the petitioner to deposit an amount for the release of goods. The appeal preferred by the petitioner against the aforesaid was rejected.
Petitioner contended that there were no discrepancies found on the physical verification of the goods and the documents. It was argued that since the driver was not aware of the GST laws, he could not have applied for an extension of the E-way Bill. The circumstances were beyond the control of the Petitioner.
Further, it was argued that the Petitioner had in its reply specifically stated that due to the unforeseen illness of the driver, the goods could not reach in time. However, the Authority summarily dismissed its reply as not acceptable.
Relying on the decision of Allahabad High Court in Bharti Airtel Ltd. vs. State of U.P., Petitioner argued that once the Petitioner refused to deposit tax under Section 129(3), the Authority was bound to initiate proceedings under Sections 73,74 and 75 read with Section 122 of the Act.
Counsel for the Department alleged that since the E-way bill had expired, the Petitioner had contravened the provisions of the law. It was also alleged that the expired E-way bill shows the intention of the Petitioner to evade tax liabilities. Further, no medical record of the driver was submitted as evidence to show that he was actually ill.
The Court observed that there were no discrepancies in the quality and quantity of goods in transit. The order was passed relying solely on the fact that the E-way Bill had expired. Further, the Court specifically noted that the intention to evade tax was not alleged in any orders passed against the Petitioner.
The Court differentiated the judgment of the Apex Court in Assistant Commissioner (ST) v. Satyam Shivam Papers Pvt. Ltd. on facts as in that case, there was a road block due to anti-CAA protests. However, in the present case, the driver’s illness and vehicle breakdown were factors in the delay caused and no evidence to prove the same had been brought on record.
With respect to the reliance placed by the Petitioner on the decision of Allahabad High Court in Bharti Airtel Ltd. v. State of U.P., Justice Piyush Agrawal held
“Similarly the Division Bench of this Court in Govind Tabacco Manufacturing Co. (supra) has quashed the proceedings on the facts of that case as at the time of movement of the goods Covid-19 was at peak and there was restrictions in the movement, therefore, the Division Bench of this Court had quashed the detention and directed for release of the goods and also imposed costs. The facts of the present case is entirely different as stated above. Therefore the arguments of the petitioner before this court that if the dealer does not come forward for depositing the penalty amount as determined under section 129(3) of the Act the proceedings ought to have been initiated under sections 73, 74 and 75 of the Act read with section 122 of the Act cannot be permitted to be raised at this stage as neither in the reply to the show cause notice nor before the appellate authority any submission was made. In view of the above, the judgment replied upon in the case of Bharti Airtel Ltd. (supra) has no aid to the petitioner.”
Though the Court noted that Petitioner had not brought on record anything to prove the driver’s illness, the Authority in its order had not assigned any reason for disbelieving the said contention.
Accordingly, the writ petition was allowed and the matter was remitted back to the Authority for fresh adjudication.
Case Title: M/S Rateria Laminators Pvt. Ltd. vs. Additional Commissioner Grade 2 And Another [WRIT TAX No. - 599 of 2023]
Case Citation: 2023 LiveLaw (AB) 268
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