Dynamic Rubbers Private Limited Vs Deputy Commissioner (Ae) CGST (Gujarat High Court)
The Gujarat High Court has ruled that a minor technical lapse in GST compliance should not result in a substantial penalty. In the case of Dynamic Rubbers Private Limited vs. Deputy Commissioner (Ae) CGST, the court reduced a penalty of Rs. 11,08,150 to a mere Rs. 25,000. The judgment centered on the petitioner’s failure to generate Part-B of an e-way bill for goods that were intercepted during transit. The court found that since there was no intent to evade taxes, the strict and high penalty was disproportionate to the procedural violation.
The petitioner, a company that manufactures rubber items, had imported goods from China after paying the Integrated Goods and Services Tax (IGST). The goods were being transported from Mundra Port to their godown in Ahmedabad. The company had generated Part-A of the e-way bill but claimed that due to technical glitches on the GST portal, it was unable to generate Part-B. The transport was intercepted, and the authorities issued a detention order and a show-cause notice, imposing a penalty of Rs. 11,08,150. The company paid the penalty to release the goods but subsequently appealed the order, arguing that the violation was minor and without any intention to evade tax.
