Case Law Details
Shyam Sel And Power Limited Vs State Of U.P. And 2 Others (Allahabad High Court)
The Allahabad High Court recently adjudicated the case of Shyam Sel And Power Limited vs. State Of U.P., focusing on the imposition of a GST penalty. The court examined whether the penalty was justified in light of the circumstances surrounding the cancellation of an e-way bill during goods transportation.
The petitioner, engaged in the business of manufacturing industrial steel components, transported goods accompanied by valid documentation, including tax invoices and e-way bills. However, during transit, the e-way bill was canceled by the purchasing dealer without notifying the petitioner. Upon interception, authorities seized the goods and imposed a penalty under section 129(3) of the CGST Act.
The petitioner argued that there was no intent to evade tax and promptly informed authorities about the canceled e-way bill. They contended that the penalty should have been levied under section 122(ix) of the CGST Act instead. The court observed that initiating proceedings under section 129 of the CGST Act required evidence of intent to evade tax, which was absent in this case. Referring to relevant sections of the Act, the court emphasized the necessity of intent to evade tax for invoking sections 129 and 130.
Drawing from precedent, including a Supreme Court judgment and a recent Division Bench ruling, the court concluded that the penalty imposed on the petitioner was unjustified. The court quashed the impugned orders, highlighting the absence of intent to evade tax and the abuse of power by revenue authorities.
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