M/S Sunil Traders vs. State Of U.P. And 2 Others

Held

The Court held that the matter was squarely covered by the Division Bench decision of this Court in M/s Godrej and Boyce Manufacturing Co. Ltd. and M/s Varun Beverages Limited. In these judgments, it was held that during the period from 01.02.2018 to 31.03.2018, the requirement of an e-way bill under the U.P. GST Act and its Rules was unenforceable. Therefore, neither the seizure of goods nor the imposition of penalty could be sustained. The Court agreed with this reasoning. Consequently, the impugned orders dated 22.12.2020 and 12.02.2018 were quashed. The Court directed that any amount deposited by the petitioner be refunded within one month. The ratio decidendi is that penalties imposed for non-compliance with e-way bill provisions during a period when such provisions were held unenforceable are liable to be quashed.

Facts

The petitioner, M/s Sunil Traders, challenged two orders: one dated 22.12.2020 passed by respondent no. 2 and another dated 12.02.2018 passed by respondent no. 3. The latter order imposed a penalty for transporting goods without an e-way bill under the U.P. GST Act, 2017, during the period of 01.02.2018 to 31.03.2018. The petitioner contended that the controversy was covered by previous judgments of the High Court. The respondent State did not dispute this proposition, admitting that the cited judgments had attained finality as they were not appealed.

Key Issues

1. Whether the penalty imposed for transporting goods without an e-way bill during the period 01.02.2018 to 31.03.2018 is sustainable, considering the enforceability of e-way bill requirements under the U.P. GST Act, 2017, read with the Rules framed thereunder? Petitioner's Contention: The petitioner argued that the requirement of an e-way bill during the specified period was unenforceable, relying on the Division Bench judgments of this Court in M/s Godrej and Boyce Manufacturing Co. Ltd vs. State of U.P. and M/s Varun Beverages Limited vs. State of U.P. and Others. Consequently, the seizure of goods and imposition of penalty were unjustified. Respondent's Contention: The respondent State, through the Additional Chief Standing Counsel, did not dispute the petitioner's proposition and fairly admitted that the judgments relied upon by the petitioner had attained finality.