Allahabad High Court Quashes Penalty on J.K. Cement for Missing E-Way Bill
Allahabad High Court Quashes Penalty on J.K. Cement for Missing E-Way Bill
The Allahabad High Court has overturned a penalty of ₹1,75,236 that was levied against J.K. Cement Ltd. (the petitioner) due to the absence of an e-way bill. The Court ruled that the penalty was imposed for a minor technical error, even though there were no discrepancies found in the documents accompanying the goods.
The petitioner dispatched five shipments containing various products from Gwalior to Panna, Madhya Pradesh, with the goods passing through Uttar Pradesh. During transit, the goods were halted in Uttar Pradesh because the e-way bill was not accompanying them. As a consequence, a penalty was imposed on the petitioner under Section 129(3) of the Goods and Services Tax Act (GST Act). The petitioner appealed this decision, but the initial appeal was dismissed.
The petitioner's counsel contended that a notification issued on April 24, 2018, in the State of Madhya Pradesh, explicitly stated that only items listed at serial numbers 1 to 11 of the notification were obligated to carry an e-way bill during transportation. According to this notification, it was argued that the goods in question, during their transit within the State of Madhya Pradesh, were not legally required to have an e-way bill. Additionally, it was stressed that all necessary documents, including tax invoices and a G.R., accompanied the goods, and no discrepancies were found in these documents.
Conversely, the Additional Chief Standing Counsel supported the contested order and asserted that the goods in question lacked an e-way bill, which was a mandatory requirement during transportation. Furthermore, it was clarified that the notification referred specifically to the State of Madhya Pradesh and not the State of Uttar Pradesh. As a result, he backed the dismissal of the writ petition.
The Allahabad High Court bench, presided over by Justice Piyush Agrawal, noted that both lower authorities had acknowledged that the goods were in transit and their ultimate destination was Panna in Madhya Pradesh. The seizure had occurred solely because the e-way bill was missing. Significantly, the Bench underscored that, at the relevant time, the State of Madhya Pradesh had exempted the goods from the requirement of carrying an e-way bill.
The Bench also pointed out that the contested order explicitly mentioned that both the starting point and the final destination of the goods in question were within the State of Madhya Pradesh. This indicated that the authorities believed that the goods were not intended to be offloaded in the State of Uttar Pradesh, and there was no intention to evade taxes. Nevertheless, the penalty had been imposed primarily due to a minor technical error. Considering these circumstances, the Bench concluded that the contested orders were not legally justifiable.
Consequently, the writ petition was granted, and the contested orders were annulled. Any funds previously deposited by the petitioner during the course of the ongoing litigation were ordered to be refunded to the petitioner within 20 days.
