No penalty can be levied against the taxpayer for failing to generate an E-tax invoice.

A company filed a writ petition challenging a penalty imposed for not generating an electronic tax invoice (E-waybill) before transporting goods.

Key Points:

• The company argued that all necessary documents, including a regular tax invoice, delivery challans, and an E-waybill, accompanied the goods.
• The E-tax invoice was not generated due to a technical error, not an attempt to evade tax.
• The company's annual turnover was below the threshold requiring E-tax invoice generation at the time of the incident.
• The threshold for mandatory E-tax invoices had recently been lowered, and the company claimed a bona fide mistake in not being aware of the change.

Court's Decision:

• The court acknowledged a technical error but no evidence of intent to evade tax.
• The court noted the company's annual turnover was below the threshold for mandatory E-tax invoices at the time.
• The court found a bona fide mistake due to the recent reduction in the threshold, without any established "mens rea" (guilty mind) for tax evasion.
• As a result, the court quashed the penalty order and directed the authorities to return any deposited amount.

GST Case Law Nancy Trading Company Versus State of U.P.

Citation-2024 TAXONATION 1671 (ALLAHABAD)

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