M/S Nanhe Khan Timber Stores vs. State Of U.P. And 3 Others

Held

The Court allowed the writ petition, quashing both the impugned order dated 29.03.2018 passed by the Assistant Commissioner and the appellate order dated 03.09.2020. The Court held that the matter was squarely covered by its previous decisions in M/s Godrej and Boyce Manufacturing Co. Ltd. and M/s Varun Beverages Ltd. These precedents likely addressed the unenforceability of the e-way bill requirement during the specified period, thereby invalidating the basis for the penalty. Consequently, the penalty imposed under Section 129(3) of the UPGST Act was deemed unsustainable. The Court also implicitly found that the appellate authority's rejection on limitation was erroneous, given the allowance of the petition. The petitioner was directed to be refunded any amount deposited within one month. The Court did not expressly leave any issue undecided.

Facts

The petitioner, M/s Nanhe Khan Timber Stores, challenged an order dated 29.03.2018 by the Assistant Commissioner, Mobile Squad Unit, Bulandshahr, under Section 129(3) of the U.P. Goods and Services Tax Act, 2017 (UPGST Act). This order imposed a penalty of Rs.96,732/- for transporting timber from Delhi to Sikandrabad without an e-way bill-01 prescribed under the UPGST Act. The petitioner had generated a central e-way bill. The vehicle was intercepted on 28.03.2018. The petitioner deposited the demanded amount on 28.03.2018. Subsequently, the petitioner's appeal against the penalty order was rejected by the Additional Commissioner on 03.09.2020 on grounds of limitation, despite the petitioner claiming the penalty order was never communicated and the appeal was filed after obtaining a copy. The petitioner also contended that the requirement for e-way bill-01 under the UPGST Act was unenforceable during the period 01.02.2018 to 31.03.2018.

Key Issues

1. Whether the penalty imposed under Section 129(3) of the UPGST Act for the alleged non-possession of an e-way bill-01 is sustainable, considering the petitioner's contention that the requirement for such an e-way bill was unenforceable between 01.02.2018 and 31.03.2018. 2. Whether the appellate authority erred in rejecting the petitioner's appeal on the ground of limitation, particularly in light of the petitioner's claim that the original penalty order was not communicated and the appeal was filed promptly after obtaining a copy. Petitioner's Arguments: The petitioner argued that the penalty was unjustified as the e-way bill-01 requirement under the UPGST Act was unenforceable during the relevant period. They also argued that the appellate authority wrongly dismissed their appeal on limitation, as they had not been properly served with the initial order and filed the appeal expeditiously upon learning of it. The petitioner relied on decisions in M/s Godrej and Boyce Manufacturing Co. Ltd Vs. State of U.P. and others and M/S Varun Beverages Limited Vs. State of U.P. and 2 others. Respondent's Arguments: The respondent State did not present specific arguments on the enforceability of the e-way bill or the limitation issue in the provided text, beyond the fact that a counter affidavit was on record. The appellate authority's decision was based on the finding that communication was duly made.