Urmilla Enterprises Pvt. Ltd. Vs State Tax Officer-I (Madras High Court)
Review of matter imposing 200% Penalty on non-generation of E-Invoice due to non-consideration of Circular No. 10/2019 dated 31.05.2019
Conclusion: The Officer was directed for fresh consideration of Penalty @200% for non-generation of an e-invoice as there was a failure on the part of the department to consider relevant GST circular No. 10/2019 dated 31.05.2019. If the Officer had come to the conclusion that benefit available by virtue of the said circular was not applicable for assessee, the respondent should release the vehicle upon the deposit of sum of Rs.10 Lakhs (Rupees Ten lakhs only) by assessee.
Held: Assessee-company had sold an old KOBELCO SD520 excavator to M/s. Stone Factory on 01.01.2025, supported by an invoice dated 27.12.2024 and an e-way bill dated 01.01.2025. During transit, the goods were detained for non-generation of an e-invoice. A show cause notice (Mov-07) was issued proposing a 200% penalty. Assessee explained the delay was due to technical glitches, generating the e-invoice on 02.01.2025 as 01.01.2025 was a public holiday. Even after this, the Officer imposed a penalty of Rs. 39.6 lakhs. Assessee-company strongly contended that the demand would not withstand by virtue of Circular No. 10/2019 dated 31.05.2019, issued by the Commissioner, Commercial Tax. Additional Government Pleader on behalf of the respondent submitted that the impugned order was passed by the respondent authorities without paying attention to the Circular No. 10/2019 dated 31.05.2019. Therefore, the matter was remanded to the respondent for fresh consideration in light of Circular No. 10/2019 dated 31.05.2019. High Court noted that the impugned order was passed without considering Circular No. 10/2019 dated 31.05.2019. It was made clear that if the respondent had come to the conclusion that benefit available by virtue of the said circular was not applicable for assessee, the respondent should release the vehicle upon the deposit of sum of Rs.10 Lakhs (Rupees Ten lakhs only) by assessee and if the detained vehicle was kept idle, it would get damaged and its value also get deteriorated till final orders being passed, if the said order was challenged, attained finality.
