Case Law Details
Faruk Rathore Prop. Of M/s Hindustan Trading Company Vs Dy. Commissioner, Central Goods And Service Tax (Rajasthan High Court)
In a recent case before the Rajasthan High Court, Faruk Rathore, Proprietor of M/s Hindustan Trading Company, challenged the imposition of a heavy penalty for a minor offense related to a lapsed e-way bill during transit. The case sheds light on the disproportionate penalties imposed under the Central Goods & Services Tax Act, 2017 (CGST Act, 2017).
The petitioner, engaged in the trade of iron items, purchased goods worth Rs. 9,43,993/- from R.K. Steels, Jaipur, on 25.02.2021. An e-way bill was generated for the transportation of these goods, valid until 27.02.2021. However, due to unforeseen circumstances such as a punctured tire and unavailability of labor, the goods arrived late at the destination, resulting in the expiration of the e-way bill.
Upon inspection, it was discovered that the e-way bill had expired 44 minutes prior. Consequently, the goods were detained, and a penalty was imposed under Section 129(3) of the CGST Act, 2017. Despite the petitioner’s compliance with GST rules and payment of taxes, a heavy penalty was enforced.
The petitioner contested the penalty, arguing that the delay was beyond their control and did not constitute tax evasion. They cited precedents from other High Courts where similar cases were resolved in favor of the taxpayer.
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