M/S Jyoti Traders vs. State Of U.P. And 2 Others
Original PDF →Facts
The petitioner, M/s Jyoti Traders, is challenging orders dated 31.07.2021 and 01.07.2020 passed by the first appellate authority and the Assistant Commissioner, Sales Tax/State Tax, respectively. The goods were transported from Maharajganj, U.P. to Ludhiana, Punjab, with an e-way bill generated on 17.02.2018. The goods were intercepted by the mobile squad on 21.02.2018 at Shamli. A show cause notice was issued under Section 129(3) of the U.P. GST Act. The petitioner replied, and the goods were released upon filing an indemnity bond. Subsequently, an order for tax and penalty was passed, which was upheld by the appellate authority. The petitioner contends that the GST Council had dispensed with the e-way bill requirement from 01.02.2018 to 31.03.2018.
Held
The Court held that the GST Council had indeed dispensed with the mandatory provision of carrying an e-way bill until 31.03.2018. This position was settled by a Division Bench of the Court in M/S Godrej & Boyce Manufacturing Co. Ltd. (Supra), extending the benefit to all assessees who carried goods without an e-way bill during the relevant period. A coordinate Bench in HBL Power Systems Ltd. (Supra) had also taken a similar view. Therefore, the taxing authorities were not justified in levying tax and imposing penalty. The Court quashed the order dated 31.07.2021 passed by the first appellate authority and the order dated 01.07.2020 passed by the Assistant Commissioner. The ratio decidendi is that if the law, through a notification or council decision, exempts a requirement during a specific period, authorities cannot penalize for non-compliance with that requirement during that period, especially when supported by High Court precedents. The amount deposited by the petitioner is to be released within fifteen days.
Key Issues
1. Whether the imposition of tax and penalty under Section 129(3) of the U.P. GST Act was justified when the GST Council had dispensed with the mandatory requirement of carrying an e-way bill from 01.02.2018 to 31.03.2018? Petitioner's arguments: The petitioner argued that the GST Council's notification effective from 01.02.2018 exempted the requirement of an e-way bill until 31.03.2018. They relied on the Division Bench decision in M/S Godrej & Boyce Manufacturing Co. Ltd. Vs. State of U.P. & Others and a coordinate Bench decision in M/S HBL Power Systems Ltd. Vs. State of U.P. & Others. Respondent's arguments: The respondent State argued that the e-way bill downloaded by the assessee on 17.02.2018 had expired by the time the goods were intercepted on 21.02.2018, and the assessee was not in possession of the requisite e-way bill as mandated under the Act/Rules.
Sections Cited
Section 129(3)
AI-generated summary — verify with the full judgment below
Court No. - 10 Case :- WRIT TAX No. - 1175 of 2022 Petitioner :- M/S Jyoti Traders Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Rishi Raj Kapoor Counsel for Respondent :- C.S.C. Hon'ble Rohit Ranjan Agarwal,J. Heard Sri Rishi Raj Kapoor, learned counsel for the petitioner and Sri Rishi Kumar, learned Standing Counsel for the State. This writ petition has been filed for quashing the order dated 31.07.2021 passed by the first appellate authority and the order dated 01.07.2020 passed by the Assistant Commissioner, Sales Tax/State Tax, Mobile Squad, II Unit, Shamli imposing tax and penalty upon the petitioner. The case of the petitioner is that the goods were being transported from Maharajganj, U.P. to Ludhiana, Punjab and e- way bill was generated on 17.02.2018. The goods were intercepted by the mobile squad of the tax department on 21.02.2018 at Shamli. Thereafter, a show cause notice was issued under Section 129 (3) of U.P. GST Act. The same was replied by the petitioner and the goods were subsequently released vide order of this Court after the petitioner has filed indemnity bond. An order of penalty for depositing the penalty and taxes was passed by the respondent no. 3 on 01.07.2020 against which an appeal was preferred which was rejected vide order dated 31.07.2021. Sri Rishi Raj Kapoor, learned counsel for the petitioner, has submitted that the GST Council vide notification dated 23.01.2018 made effective from 01.02.2018, dispensed with the requirement of e-way bill till 31.03.2018. He has relied upon the decision of Division Bench of this Court in case of M/S Godrej & Boyce Manufacturing Co. Ltd. Vs. State of U.P. & Others, 2018 (38) VLJ 48. Reliance has also been placed upon a decision of coordinate Bench of this Court in case of M/S HBL Power Systems Ltd. Vs. State of U.P. & Others, 2022 (7) TR 6136. Learned Standing Counsel while opposing the writ petition invited the attention of the Court to paragraph no. 6 of the counter affidavit wherein it has been stated that the e-way bill which was downloaded by the assessee on 17.02.2018 had expired when the goods were intercepted by mobile squad on 21.02.2018. He further contends that at the time when the goods were intercepted the assessee was not having the requisite e- way bill, as mandated under the Act/Rules. Having heard learned counsel for the parties and perused the material on record. This Court finds that the GST Council had already dispensed with the mandatory provision of carrying e-way bill till 31.03.2018. The matter was settled by Division Bench of this Court in case of M/S Godrej & Boyce Manufacturing Co. Ltd. (Supra) extending the benefit to all those assessee who during the relevant period had carried the goods without the e- way bill and matter is no more res integra. A coordinate Bench of this Court in case of HBL Power Systems Ltd. (Supra) has also taken the similar view. In view of the said fact, the taxing authorities were not justified in levying tax and imposing penalty. The order dated 31.07.2021 passed by the first appellate authority and the order dated 01.07.2020 passed by the Assistant Commissioner, Sales Tax/State Tax, Mobile Squad, II Unit, Shamli, are unsustainable in the eyes of law and same are hereby quashed. Writ petition stands allowed. Needless to say that the amount, so deposited by the petitioner pursuant to the order, shall be released within a period of fifteen days. Order Date :- 9.1.2023 Shekhar SHASHI SHEKHAR PANDEY High Court of Judicature at Allahabad
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.