Bl Agro Oils LTD. Bareilly Thru Authorised Signatory vs. State Of U.P. Thru Secy. Institutional Finance Lko. And Ors.

Facts

The petitioner, Bl Agro Oils Ltd., challenged an order dated 31.10.2017 by the Assistant Commissioner, Commercial Tax, Mobile Squad, Lucknow, imposing tax and penalty, and a subsequent appellate order dated 23.08.2019 by the Additional Commissioner Grade-2 (Appeal-I), Lucknow, which rejected their appeal. The goods of the petitioner were intercepted on 28.10.2017. The authorities found that the invoice and e-way bill dated 23.10.2017 indicated a packing date of 26.10.2017, suggesting the documents did not relate to the intercepted goods. The petitioner contended that the goods were damaged during prior transport, returned, repacked, and then supplied using the same invoice and e-way bill. A tax liability and penalty totaling Rs. 62,500/- under Section 129(3) of the U.P. Goods and Services Tax Act, 2017, were imposed. The petitioner deposited the amount under protest.

Held

The Court held that the case of the petitioner was squarely covered by the judgment in 'M/S Anandeshwar Traders Vs. State of U.P. and Others'. The Court reiterated that it is the duty of the seizing authority to establish by evidence that an e-way bill was being reused. In the present case, the Court found no evidence produced by the seizing authority to demonstrate the reuse of the e-way bill by the petitioner. Consequently, the Court concluded that the impugned order dated 31.10.2017 and the appellate order dated 23.08.2019 could not stand. The Court set aside both orders. The ratio decidendi is that the burden of proof lies with the revenue to demonstrate the misuse of an e-way bill through positive evidence, and without such evidence, tax and penalty cannot be imposed. The writ petition was allowed, and the impugned orders were quashed.

Key Issues

1. Whether the taxing authority discharged its burden to prove by positive evidence that the e-way bill was being reused, as required under Section 129 of the U.P. Goods and Services Tax Act, 2017? 2. Whether the impugned orders imposing tax and penalty are sustainable in the absence of such positive evidence? Petitioner's Arguments: The petitioner argued that the taxing authority failed to prove by positive evidence that the e-way bill was being reused. They relied on the judgment in 'M/S Anandeshwar Traders Vs. State of U.P. and Others' (2021 U.P.T.C. [Vol. 107]-421), which held that the onus is on the seizing authority to lead positive evidence to establish reuse of an e-way bill, and mere assertion without material on record is insufficient. Respondent's Arguments: The Standing Counsel for the State did not present any arguments in the judgment.