T.K. Printers Vs Additional Commissioner Grade 2 And Another (Allahabad High Court)
Mere absence of documents during interception does not establish evasion, especially if submitted before final order, Delayed generation of e-way bill, cannot be automatically equated with intent to evade tax, Procedural Lapses Are Not Tax Evasion: Allahabad HC
In a significant ruling, the Allahabad High Court has reinforced the principle that a mere procedural lapse, such as the delayed generation of an e-way bill, cannot be automatically equated with an intent to evade tax. The Court emphasized that for the stringent provisions of Section 129 of the GST Act to be invoked, the intent to evade tax must be unequivocally established. Allahabad High Court provided relief to a petitioner by quashing the tax and penalty orders imposed under Section 129.
The Facts of the Case
The case involved the transport of four multi-product dispensing fuel machines from one location of BPCL to another at its petrol pump. At the time of interception on January 28, 2021, the e-way bill had not been generated due to a technical glitch. Crucially, no physical discrepancies were found in the goods. Despite the petitioner generating and submitting the e-way bill and a stock transfer note before the final detention order was passed, the authorities rejected these documents as an “after-thought” and proceeded to impose tax and penalty. An appeal against this decision was also rejected.
The petitioner argued that this was a case of stock transfer, not a sale, a fact certified by BPCL and not disputed by the authorities. They also cited a 2018 UP Circular which calls for the acknowledgment of legitimate explanations and corrected documents before taking action.
