Kumar Cargo Solution Vs State of Up And 3 Others (Allahabad High Court)
The Allahabad High Court, in Kumar Cargo Solution v. State of Uttar Pradesh and Others, examined the validity of a penalty order imposed under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017 read with Section 20 of the Integrated GST Act, 2017. The petitioner sought quashing of the penalty order dated July 20, 2024 (issued in Form MOV-09) and release of the seized vehicle and goods.
The petitioner argued that all documents, including the physical invoice, matched the e-invoice, and there was no attempt to evade tax. The only lapse was the non-production of the e-invoice at the time of interception, though it was generated and subsequently presented the same day. It was contended that the penalty was imposed without any finding of tax evasion, contrary to established legal principles requiring mens rea or intent to evade tax before a penalty could be levied.
The Court reiterated that penalties under GST law require proof of intention to evade tax. Referring to the factual record, it found no evidence of evasion and held that a bona fide mistake cannot justify punitive action. Consequently, the impugned order was quashed, and the respondents were directed to release the vehicle and goods within two weeks.
