CASE TITLE: M/S Rateria Laminators Pvt. Ltd. vs. Additional Commissioner Grade 2 And Another [WRIT TAX No. – 599 of 2023]
DECIDED ON: 16.08.2023
CORAM: Hon’ble Piyush Agrawal,J
INTRODUCTION
The decision by the Allahabad High Court involved overturning a ruling based on Section 129(3) of the UPGST Act 2017. This ruling had imposed a penalty based solely on the absence of evidence regarding the driver’s illness and the vehicle breakdown.
The petitioner regularly received goods from GAIL in Auraiya, Uttar Pradesh. Specifically, two invoices dated 6.3.2023 were issued for these inward supplies. E-way bills were generated, valid until 12.3.2023, and a Goods Receipt (GR) was also created on the same day. The GR explicitly referenced the invoice numbers and E-way bill details.
FACTS
While en route, the vehicle operator fell ill and could not complete the delivery within the timeframe specified in the E-way Bill. Consequently, on 13.3.2023, the vehicle was intercepted, and Form GST MOV04 was generated on 14.3.2023. Following this, Form GST MOV01 was produced on 23.3.2023, leading to an immediate decision that the transported goods were lacking proper documentation due to the expiration of the E-way bills.
A notification via Form GST MOV 07, pursuant to section 129(3) of the UPGST Act, was served, suggesting the imposition of penalties under sections 129(1)(a) and 129(1)(b) of the Act. Subsequently, an order was enacted under section 129(3) of the Act, requiring the petitioner to submit a specified amount to facilitate the release of the goods. Despite the petitioner’s appeal against this, it was dismissed.
The petitioner argued that there were no discrepancies between the physical inspection of the goods and the accompanying documentation. They contended that the driver’s unfamiliarity with GST laws prevented them from seeking an extension of the E-way Bill. The petitioner maintained that the situation was beyond their control.
Furthermore, the petitioner asserted that in their response, they explicitly stated that the goods could not be delivered on time due to the unforeseen illness of the driver. However, the Authority swiftly dismissed this explanation.
Drawing from the precedent set by the Allahabad High Court in Bharti Airtel Ltd. vs. State of U.P., the petitioner contended that after refusing to remit taxes under Section 129(3), the Authority should have initiated proceedings under Sections 73, 74, and 75, in conjunction with Section 122 of the Act.
The Department’s representative alleged that the petitioner’s failure to renew the E-way bill indicated a breach of legal provisions. They also claimed that the expired E-way bill suggested the petitioner’s intent to evade tax obligations. Additionally, no medical records substantiating the driver’s illness were provided as evidence.
CASE ANALYSIS AND DECISION
The court observed that there were no inconsistencies concerning the quality and quantity of goods during their transportation. The decision was made based solely on the expiration of the E-way Bill. Furthermore, the court explicitly highlighted that there were no allegations of tax evasion in any of the orders issued against the petitioner.
The court distinguished the judgment made by the Supreme Court in the case of Assistant Commissioner (ST) v. Satyam Shivam Papers Pvt. Ltd. This distinction was drawn on the grounds that the aforementioned case involved a roadblock due to anti-CAA protests, whereas in the current scenario, the delay was attributed to the driver’s illness and vehicle breakdown. However, no substantiating evidence regarding these factors causing the delay had been presented on record.
While acknowledging that the petitioner had not provided any evidence to support the driver’s illness, the court noted that the Authority’s order had not provided any rationale for discrediting this claim.
Consequently, the writ petition was granted, leading to the matter being referred back to the Authority for a fresh assessment.
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Written by- Mansi Malpani
