GST Penalty Quashed:
M/s Tata Hitachi Constrution Machinery Company Pvt. Ltd. vs. Revenue [Writ Tax No.2148 of 2025]
Background of the Case
The appellant, challenged an order dated 28.04.2025 passed by the GST Department wherein the petitioner has been imposed with penalty under Section 129(3) of the U.P.
G.S.T. Act, 2017. The penalty stemmed from the interception of goods in transit, where the authorities found that although an e-way bill was being carried, Part-B of the bill had not been filled out. Based on this technical lapse, a notice was issued and, subsequently, the penalty was imposed citing violation of Rule 138 of the GST Rules, 2017.
Arguments by the Appellant
The appellant, argued that the omission of Part-B in the e-way bill was a mere technical breach without any intention to evade tax. It was asserted that the proceedings lacked any specific finding or evidence indicating an attempt to defraud the revenue. To support their case, the appellant relied on a precedent set in M/s Precision Tools India vs. State of U.P. (Writ-Tax No. 415 of 2023), where the Allahabad High Court held that non-filling of Part-B of an e-way bill, in the absence of tax evasion intent, does not warrant penalty under Section 129.
Respondent’s Response
The respondent, Revenue defended the imposition of penalty by emphasizing that the required documentation was incomplete and that the legal mandate of Rule 138 had been violated. While they conceded that there was no explicit finding of tax evasion in the impugned order, they maintained that the penalty was justified regardless of intent. Nonetheless, they did not dispute that the High Court had consistently ruled in favour of petitioners in similar situations, particularly in light of the Precision Tools judgment.
Court Findings and Decision
The Division Bench of Allahabad High Court scrutinized the order under challenge and observed that it merely cited the procedural violation without any reference to an intent to evade tax. The Court reiterated its earlier position that, unless there is a recorded finding of tax evasion, mere non-filling of Part-B of the e-way bill cannot attract penalty under Section 129 of the Act. Accordingly, the writ petition was allowed, and the impugned order dated 28.04.2025 was quashed.
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Allahabad High Court Quashes GST Penalty
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