No Difficulties In Generating E-Way Bill After April 2018: Allahabad High Court Upholds Penalty U/S 129 GST For Late Production Of E-Way Bill

The Allahabad High Court has held that when the Goods and Services Tax Regime was launched in 2017, there were difficulties in downloading e-way bills. However, the difficulties were resolved and from April 2018 there were no difficulties in generating the same.

While upholding the penalty order under Section 129 of the Goods and Services Tax Act, 2017 for production of e-way bill after interception, Justice Shekhar B. Saraf held

“Mere furnishing of the documents subsequent to the interception cannot be a valid ground to show that there was no intention to evade tax. There must be some reasonable grounds to justify the non-production of documents at the proper time.”

Factual Background

Petitioner, a registered dealer, TMT Bars (sariya) to one M/s Sahai & sons, Orai vide Tax Invoice in which vehicle number was mentioned as MP 16H 1584 for transportation of goods. When the goods were intercepted, an order for physical verification/inspection of the conveyance, goods & documents under Section 68(3) of the Act was passed on grounds that no documents were produced at the time of interception.

After the order for physical verification was issued, petitioner produced the tax invoices and e-way bill. The authority rejected the e-way bill since it was generated after interception and penalty under Section 129(3) was imposed. Appeal filed by the petitioner was also dismissed.

Counsel for petitioner argued that due to unavailability of the computer operator responsible for generating the e-way bill, the goods were inadvertently dispatched by the dispatcher. It was argued that the e-way bill was downloaded at 2:45pm whereas the interception took place at 3:59pm on the same day, accordingly, it was submitted that the e-way bill was generated prior to interception.

It was further argued that Section 129 of the GST Act is applicable only to goods in transit and to stationary vehicles, like that of the petitioner. It was argued that there was no intention to evade tax therefore penalty under Section 129 of the Act could not be imposed.

Per contra, counsel for respondent argued that Section 129 includes any goods or conveyance in transit must be accompanied with proper documentation as per the GST Act and Rules. It was submitted that the goods of the petitioner were in transit without being accompanied by the e-way bill and tax invoices which is a violation of the Act and specifically Rule 138 which mandates that goods in transit must be accompanied by e-way bill.

High Court Verdict

The Court observed that it was evident that the petitioner had failed to produce the e-way bill at the time of interception due to certain difficulties, in such circumstances it was necessary to see whether there was actual intention to evade tax on part of the petitioner.

The Court held that goods not accompanied by both tax invoices and e-way bill is not a common mistake. It shifts the burden on the assesee to show that there was no intention to evade tax.

The Court relied on its earlier decision in M/s Akhilesh Traders V. State of U.P. and 3 others wherein it had held that a presumption of intention to evade tax arises where goods are not accompanied by tax invoices and e-way bill.

The Court held that the argument of the petitioner that the truck was parked at the godown for unloading of goods was unsustainable as it was not supported by facts. Since the petitioner had failed to rebut the presumption regarding intention to evade tax, the Court upheld the penalty under Section 129 of the GST Act.

Case Title: M/S Jhansi Enterprises Nandanpura Jhansi vs. State Of U.P. And Others 2024 LiveLaw (AB) 136 [Writ Tax No. 1081 of 2019]

Case citation: 2024 LiveLaw (AB) 136

Counsel for Petitioner: Shubham Agrawal

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