Validity of the demand and penalty if the E Way bill was invalid at the time of interception of goods

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Validity of the demand and penalty if the E Way bill was invalid at the time of interception of goods

 

The landmark judgement is given by the Hon’ble Delhi High Court in Nirmal Kumar Vs Commissioner of CGST and Anr WP(C) 8585/2022 wherein it has been held that no demand and penalty should be levied under the GST laws in absence of intent to evade tax.

In this case, the transport vehicle carrying the goods of the taxpayer was intercepted. It was noted that the E-Way Bill pertaining to the goods had expired at the time of interception.

 

An order raising demand and penalty was passed by the GST Authorities. The taxpayer paid the same in protest.

It was further observed that there had been a change of vehicle amidst travel that led to a delay of delivery of goods.

Delhi High Court held that the Order levying demand and penalty should be set aside for the following reasons:

  1. The only reason for the demand and penalty was that the E Way bill was invalid at the time of interception of goods.
  2. There is no intention of the taxpayer to wilfully evade taxes.
  3. The invalidity of E Way bill was attributable to certain genuine reasons which are not deliberated upon.Accordingly the case was remanded back to the GST authorities for consideration.

 

The copy of the order is as under:

 

Eway bill penalty (1)

 

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