Whether penalty can be imposed if Part B of the E-way bill not filed due to technical difficulties?
No, the Honorable Allahabad High Court in the case of Precision Tools India v. State of Uttar Pradesh [2024 TAXONATION 163 (ALLAHABAD)] held that non-filling of Part 'B' of the E-Way Bill on technical difficulties and without any intention to evade tax would not lead to the imposition of penalty.
The Honorable Allahabad High Court observed that the Respondent has been unable to indicate any intention of the Petitioner to evade tax andrely on M/s. Roli Enterprises v. State of U.P. and Others [2024 TAXONATION 57 (ALLAHABAD)] wherein the Court had considered two judgments of the Allahabad High Court in VSL Alloys (India) Pvt. Ltd. v. State of U.P. and another [2018 TAXONATION 169 (ALLAHABAD)] and M/s Citykart Retail Private Limited through Authorized Representative v. Commissioner Commercial Tax and Another [2023 U.P.T.C. [Vol.113]-173] and held that non-filling up of Part 'B' of the e-Way Bill by itself without any intention to evade tax would not lead to the imposition of penalty under Section 129(3) of the UPGST Act. The Honorable Court held that the defect was technical only and without any intention to evade tax. Accordingly, the penalty imposed under Section 129(3) of the UPGST Act is unsustainable. The Impugned Orders were quashed and set aside.
Author’s Comments:
As per Circular No.64/38/2018 dated 14.09.2018, a general penalty under section 125 of the GST Act must be imposed in case of minor breaches or discrepancies.
In the Author’s considered opinion, all the discrepancies in relation to the movement of goods except the fatal errors like not accounting for transaction of supply in the books of account, are to be treated as minor discrepancies and no penalty u/s 129 of the GST Act can be imposed.
As per Section 129 and Rule 138A of the GST Act, until and unless mensrea exists and is proved, all the errors and omissions have to be termed as non-fatal errors and no penalty under section 129 can be imposed.
A Similar judgment was delivered by the Honorable Allahabad High Court in the case of M/s. Varun Beverages Ltd. v. State of Uttar Pradesh [2024 TAXONATION 256 (ALLAHABAD)], wherein the court set aside the orders imposing penalty under Section 129(3) of the UPGST Act on the reason that the defect was of a technical nature only and without any intention to evade tax.
Topic-Precision Tools India v. State of Uttar Pradesh
Citation-2024 TAXONATION 163 (ALLAHABAD)
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