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Hemant Taneja vs State of Uttar Pradesh

Case Title

Hemant Taneja vs State Of U.P. And 3 Others 

Court

Allahabad High Court

Honorable Judges

Jusrice Ajay Bhanot

Citation

2023 (11) GSTPanacea 252 HC Allahabad

WRIT TAX No. – 1031 of 2023

Judgment Date

 21-November-2023

The case at hand involves a dispute regarding a penalty imposed on the petitioner, M/s. J.S. Enterprises, by the Assistant Commissioner of Commercial Tax, Mobile Squad-VII, Ghaziabad. The penalty, amounting to Rs. 1,83,442, was imposed under Section 129 (3) of the GST Act, based on an order dated 04.01.2023. The petitioner appealed this decision, but the appellate authority, the Additional Commissioner of State Tax, upheld the penalty in an order dated 09.05.2023.

The petitioner, dissatisfied with both the original penalty and the appellate decision, has filed a writ petition challenging these orders. M/s. J.S. Enterprises, owned by the petitioner, is engaged in trading taxable goods falling under Chapter-74 of the Goods and Service Tariff Act. The petitioner holds valid registration under the GST Act and possesses a GST Identification Number (07AECPT6934N1ZU) issued by the competent authority.

The petitioner received an order from M/s. Vaishnavi Electronics, Ghaziabad, for the supply of Copper Clad Laminate and other items. In response, the petitioner prepared an e-Invoice (No.766/2022-23) on 04.01.2023 at 10:10 a.m. Subsequently, the petitioner registered this invoice on the common GST portal, and an e-Way Bill (No.721309051066) was auto-generated at 10:13 a.m. on the same day.

The crux of the petitioner’s argument revolves around the legality and justification of the penalty imposed. Both the petitioner and the State, represented by learned counsels Shri Praveen Kumar and Shri Rishi Kumar respectively, presented their cases before the court.

This summary outlines the sequence of events leading to the imposition of the penalty, the petitioner’s registration and business activities, and the key arguments presented by both parties. The court will now consider the merits of the case and decide whether to uphold or overturn the penalty imposed on the petitioner.

In a recent incident, a petitioner firm found itself embroiled in a legal battle with revenue authorities over the transportation of goods, as detailed in e-Invoice No.766/2022-23 and e-Way Bill No.721309051066, both dated 04.01.2023. Despite the petitioner’s attempts to demonstrate the legitimacy of the transported goods through valid documentation as per the GST Act, authorities issued a detention order for the vehicle and its cargo.

Subsequently, on 04.01.2023, a show cause notice was issued to the petitioner, outlining the alleged deficiencies in documentation. The notice highlighted that while a tax invoice (No.766/2022-23, dated 04.01.2023) was presented by the vehicle driver, it lacked the signature of the authorized signatory. Additionally, the driver failed to produce other requisite documents, leading authorities to assert that the goods were transported without proper documentation, contravening GST Act provisions.

The show cause notice further noted that during inspection, the petitioner’s representative was present and had indeed produced an e-Invoice (No.766, dated 04.01.2023) and an e-Way Bill (dated 04.01.2023), both generated at 10:10 AM and 10:13 AM, respectively. While these documents disclosed the transported goods, authorities raised concerns regarding their absence during the vehicle’s interception, indicating a violation of procedural requirements.

The crux of the issue lies in the discrepancy between the documentation presented after the interception and the lack thereof at the time of interception, prompting authorities to question the validity and timeliness of the provided documents. The petitioner must address these concerns to refute the allegations of non-compliance with GST Act provisions and secure the release of the detained vehicle and goods.

Section 138 of the GST (Goods and Services Tax) Rules encompasses provisions concerning the imposition of penalties for contravention of the GST Act and its accompanying rules. In a specific case, the petitioner found themselves in a situation where they had to pay a penalty to facilitate the release of goods for onward transportation to the buyer. This penalty stemmed from an order dated 04.01.2023, purportedly issued under Section 129(3) of the GST Act. It was noted in this order that the petitioner had indeed provided the necessary documentation, including an e-Invoice and an e-Way Bill, which clearly outlined the goods being transported. However, due to the failure of the vehicle driver to produce relevant documents at the time of interception, a violation of GST Act provisions, in conjunction with associated rules, was established, warranting the imposition of a penalty under Section 129(1)(a) of the GST Act.

Subsequently, the impugned order was appealed by the petitioner, who invoked Section 107 of the GST Act to initiate an appeal process before the appellate authority. This step indicates the petitioner’s intent to challenge the penalty imposed, possibly on grounds such as procedural irregularities, misinterpretation of facts, or disproportionate punishment.

In essence, this situation illustrates the intricate processes and consequences involved in GST compliance, where even minor discrepancies or procedural lapses can lead to penalties, underscoring the importance of meticulous adherence to regulatory requirements to avoid such repercussions.

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Hemant Taneja

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