M/S Citykart Retail PVT. LTD. Thru.Authorizd Representrative vs. The Commissioner Commercial Tax U.P. Gomti Nagar Lko. And Anr.

Held

The Court allowed the writ petition, setting aside the impugned order dated April 18, 2018, and the appellate order dated May 14, 2019. The Court found that the sole allegation against the petitioner was the incomplete Part-B of the e-way bill, with no allegation of goods being transported without payment of tax. The petitioner's explanation for the incomplete e-way bill was supported by departmental circulars acknowledging technical problems. The Court held that no intent to evade duty could be ascertained solely on the basis of the incomplete Part-B, especially given the vehicle had a Delhi number, an issue previously addressed by this Court in VSL Alloys India Pvt. Ltd. The Court directed the respondents to refund the amount paid by the petitioner within two months. No issue was expressly left undecided.

Facts

The petitioner, M/s Citykart Retail Pvt. Ltd., challenged a demand/penalty order dated April 18, 2018, passed by the Commissioner Commercial Tax, UP, and an appellate order dated May 14, 2019. The petitioner's vehicle, transporting goods from Gurgaon, Haryana, to Rae Bareli, UP, was inspected on April 17, 2018, at Auraiya, UP. The department found that Part-B of the e-way bill was incomplete, leading to the detention and subsequent seizure of the goods. The petitioner explained that a technical error prevented the vehicle number from being registered in Part-B. The petitioner had paid Rs. 1,36,300/- as tax and a like amount as penalty to get the goods released.

Key Issues

1. Whether the impugned demand and penalty order, and the appellate order upholding it, are liable to be set aside in light of the technical glitch in filling Part-B of the e-way bill and subsequent departmental clarifications and circulars? (Question of law) Petitioner's arguments: The petitioner contended that the incomplete Part-B of the e-way bill was due to a technical error, specifically mentioning issues with Delhi vehicle numbers and the form's inability to accept zeros, as acknowledged by the department's Clarificatory Circular dated March 18, 2018 (Annexure no.13). They argued there was no intent to evade duty. Furthermore, they relied on a Ministry of Finance circular dated September 14, 2018, advising against invoking Section 129 of the CGST Act for minor errors like missing digits in vehicle numbers. They also cited this Court's judgment in VSL Alloys India Pvt. Ltd. vs. State of U.P. and another (Writ Tax No.637 of 2018) where similar circumstances led to the setting aside of a seizure order. Respondent's arguments: The Standing Counsel defended the impugned orders, relying on paragraph 8 of the counter affidavit, which rejected the petitioner's stand that the incomplete Part-B was due to a technical glitch.