Ratan Enterprises Vs State of U.P. And 2 Others (Allahabad High Court)
Summary: The Allahabad High Court allowed the writ petition filed by Ratan Enterprises against a penalty imposed under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017, for failure to fill Part B of an E-Way Bill. The Court held that a technical defect, without any indication of an intention to evade tax, did not justify the penalty in the circumstances of the case.
The goods were transported with an invoice, E-Way Bill, gate pass, 9R and bilty. Although Part B of the E-Way Bill was incomplete, the invoice and bilty contained the vehicle registration number. The Department did not dispute that the goods corresponded with the invoice and could not establish any intention to evade tax. The petitioner explained that Part A had been completed and that Part B remained unfilled because of technical difficulties.
The petitioner relied on M/s Roli Enterprises Vs State of U.P. and Others, which had considered VSL Alloys (India) Pvt. Ltd. v. State of U.P. and M/s Citykart Retail Private Limited v. Commissioner Commercial Tax. These decisions supported the proposition that failure to complete Part B of an E-Way Bill, without an intention to evade tax, would not by itself warrant a penalty under Section 129(3). The High Court found these precedents directly applicable.
Accordingly, the Court quashed the penalty order dated 6 May 2018 and appellate order dated 7 May 2019. It allowed the writ petition, granted consequential relief and directed the respondents to return the petitioner’s security within four weeks.
Cases Discussed:
M/S Roli Enterprises Vs. State of U.P. and Others — Writ Tax No. 937 of 2022, decided 16 January 2024.
VSL Alloys (India) Pvt. Ltd. v. State of U.P. and another — 2018 NTN (Vol. 67) 1 (related discussion).
M/s Citykart Retail Private Limited v. Commissioner Commercial Tax and Another — 2023 U.P.T.C. (Vol. 113) 173 (related discussion).
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Shubham Agarwal, learned counsel appearing on behalf of the petitioner and Sri Rishi Kumar, learned Additional Chief Standing Counsel appearing on behalf of the State.
2. This is a writ petiton under Article 226 of the Constitution of India wherein the petitioner is aggrieved by the order of penalty dated May 6, 2018 passed by the respondent No.2/Additional Commissioner, Commercial Tax, Mobile Squad Kasganj under Section 129(3) of the Uttar Pradesh Goods and Service Tax Act, 2017 (hereinafter referred to as “the Act”) and the order of the Appellate Authority dated May 7, 2019 passed by respondent No.3/Additional Commissioner Grade-2 (Appeal), Commercial Tax, Aligarh under Section 107 of the Act.
3. The factual matrix in the present case is that the goods were accompanied by the invoice, E-Way Bill, Gate Pass, 9R and bilty. The only flaw, on the basis of which goods were detained, was that the Part B of the E-Way Bill was not filled up. However, as pointed out by the learned counsel appearing on behalf of the petitioner, the invoice and bilty contained the number of the vehicle. Furthermore, other relevant documents were accompanying the goods. There is no dispute to the fact that the goods were not in variance with the invoice and that the department was not able to indicate any kind of intention of the petitioner to evade tax apart from the technical error of non filling up of Part B of the E-Way Bill.
4. The ground raised by Mr. Agarwal is that part A of the e-way bill was dully filled and due to some technical difficulties part B of the E-Way Bill could not be filled up. He further submitted that there was no defect in the consignment nor any discrepancy in the documents. He relied upon judgment of this Court in M/S Roli Enterprises Vs. State of U.P. and Others (Writ Tax No.937 of 2022 decided on January 16, 2024) wherein this Court had considered two judgements of the Allahabad High Court in VSL Alloys (India) Pvt. Ltd v. State of U.P. and another reported in 2018 NTN [Vol.67]-1 and M/s Citykart Retail Private Limited through Authorized Representative vs. Commissioner Commercial Tax and Another reported in 2023 U.P.T.C. [Vol.113]-173 and held that non filling up of Part ‘B’ of the E-Way Bill by itself without any intention to evade tax would not lead to imposition of penalty under Section 129(3) of the Act.
5. Per-contra, learned counsel appearing on behalf of the respondents has relied upon the penalty order as well as the order passed by the Appellate Authority to indicate that part ‘B’ of the E- Way Bill was not filled up.
6. Upon consideration of the arguments made by counsel appearing on behalf the parties and upon perusal of the documents, it is clear that the department has been unable to indicate any intention of the petitioner to evade tax.
7. Furthermore, judgement relied upon by the petitioner are directly on the point and, accordingly, I see no reason to defer from the same.
8. In the present case also, the defect was of a technical nature only and without any intention to evade tax. Accordingly, the penalty imposed under Section 129(3) of the Act is not sustainable.
9. In light of the above, the orders dated May 6, 2018 and May 7, 2019 are quashed and set aside. The writ petition is allowed. Consequential reliefs to follow. The respondents are directed to return the security to the petitioner within four weeks from date.
