No Penalties should be Imposed solely for technical errors lacking any intent to evade tax : Allahabad HC

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No Penalties should be Imposed solely for technical errors lacking any intent to evade tax : Allahabad HC

 

Facts: In the case, Rawal Wasia Yarn Dying, referred to as “the Petitioner,” who failed to complete Part ‘B’ of the E-way Bill, a necessary step under the GST rules. Despite this, the invoice accompanying the goods had all the truck details. Although the goods didn’t exactly match the invoice, it was due to a mistake rather than an attempt to avoid taxes. The Commissioner Commercial Tax penalized the Petitioner on May 24, 2022, under Section 129(3) of the UPGST Act. Even after the Petitioner appealed, the penalty was upheld on October 15, 2022. The Petitioner then approached the Allahabad High Court through a writ petition. The core argument was that the failure to complete the E-way Bill’s Part ‘B’ shouldn’t attract penalties under Section 129(3) of the CGST Act, especially considering the detailed truck information in the invoice. The Petitioner believed the mistake was technical, not a deliberate evasion of taxes.

 

Held: In Writ Tax No. 352 of 2023, the Allahabad High Court ruled in favor of the petitioner based on the following. The Court noted that the petitioner’s invoice contained comprehensive details regarding the transporting truck, effectively incorporating the necessary information. It recognized that the petitioner’s error was technical in nature and lacked any intention to evade taxes. Consequently, the Court determined that penalizing the petitioner under Section 129(3) of the CGST Act was unnecessary. Citing a similar case, the court ruled that failure to complete Part ‘B’ of the GST e-Way Bill, without intent to evade taxes, should not lead to penalties. The court directed the return of the petitioner’s security within six weeks. Consequently, the court overturned the penalties imposed by the tax authorities, providing relief to the petitioner.

Case details : Rawal Waisa Yarn Dying (P) Ltd. v, Commissioner Commercial Tax case No. Writ Tax No 352 of 2023 dated January 16,2024

The copy of the order is as under:

Ms Rawal Wasia Yarn Dying Pvt Ltd

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