Truth Udyog Metal and Steel Private Limited & Anr. Vs Deputy Commissioner (Calcutta High Court)
The Calcutta High Court recently ruled on the case of Truth Udyog Metal and Steel Private Limited & Anr. Vs Deputy Commissioner, where the key issue revolved around the imposition of a penalty under Section 129(1) of the GST Act. The appellants had generated an e-way bill for goods being dispatched from M/s. CRM Ispat Private Limited, but the dispatch details lacked full disclosure of the supplier’s information. The authorities imposed a penalty, arguing that the non-disclosure of the complete supplier details indicated a possible attempt to evade taxes. However, the appellants clarified that it was a common trade practice not to fully disclose the supplier’s details in cases of direct dispatch from the supplier to the customer, as only the place of dispatch (West Bengal, 713212) was mentioned. This was in line with the e-way bill system, which accepted this detail when generating the bill.
The Court examined whether the penalty under Section 129(1)(a) was justified, given the circumstances. The appellants had not evaded the payment of tax, and the omission was only related to the non-disclosure of the supplier’s name, which did not constitute an intention to evade tax. The Court observed that such non-disclosure was not sufficient grounds for invoking penalty provisions, especially when the goods were being dispatched in a legitimate manner with a matching vehicle registration number between the e-way bill and the tax invoice. Consequently, the Calcutta High Court set aside the penalties imposed by both the original and appellate authorities, ordering a refund of the penalty amount. This ruling clarifies that penalties under Section 129 should not be applied based solely on incomplete supplier details in e-way bills without clear evidence of tax evasion intent.
