Not carrying E-way bill being a technical fault could not be punished by levy of penalty

While hearing a writ petition contesting the validity of penalty imposed on the Petitioner pursuant to interception and seizure of goods being transported inter-State, the High Court of Allahabad observed that not carrying E-way bill was a technical fault which could not be punished by imposition of penalty, particularly when there was no discrepancy in the documents accompanying the goods.

A Single Judge Bench of Justice Piyush Agrawal noted it to be accepted by the Department that the goods had originated from and were destined for Madhya Pradesh. In that case, the goods were not meant to be unloaded in Uttar Pradesh, where they had been intercepted. This way, there was no intention made out to prevent payment of tax, the Bench observed.

The Petitioner was represented by Advocate Shubham Agarwal, whereas the Respondent-Department was represented by Advocate Rishi Kumra.  

The facts of the matter, succinctly put, are that the goods originating from Gwalior in Madhya Pradesh were dispatched for delivery at Panna, also in Madhya Pradesh. In transit, the vehicle carrying the goods was intercepted while within the territory of Uttar Pradesh.

As the driver of the vehicle was not found to be carrying the E-way bill, proceedings were commenced against the Petitioner under Section 122(xiv) of the Central Goods and Services Tax (CGST) Act, 2017.

On hearing the contentions of both the sides, the Bench observed from the record that as per Notification dated 24.04.2018 issued by the State of Madhya Pradesh, 11 items were required to be covered by an E-way bill, whereas the rest were exempted from such requirement.

The Bench further noted that the goods were not destined for Uttar Pradesh or meant to be unloaded in Uttar Pradesh. Thus, it observed that the goods ought not to have been detained just because they were not backed by an e-way bill, since the goods in question had been exempted from having an accompanying e-way bill, as per the MP Government’s notification dated 24.04.2018.

The Bench also laid emphasis on the fact that the goods originated from and were meant to be delivered in Madhya Pradesh only.

The Bench also laid emphasis on the fact of there being no discrepancies in the documents accompanying the goods. Thus, the Bench concluded that no penalty was imposable on the Petitioner in light of these facts.

Cause Title: JK Cement Ltd Vs State of UP & Ors. [WRIT TAX No. 44 of 2023 / 2023-Enterslice-10-HC-All-GST]

Click here to read/download the Order

JK-Cement-verses-State-of-UP