Order Date – 09 November 2023

Parties: M/S Sun Flag Iron And Steel Company Limited Vs State Of U.P. And 3 Others

Facts –

• The Petitioner, M/S Sun Flag Iron And Steel Company Limited, dispatched a consignment of 30 ton of non-alloy steel in rolled round Rajasthan accompanying Invoice dated 26.5.2023 as well as E-way Bill dated 26.5.2023. The E-way bill is valid upto 1.6.2023.
• Due to a heavy load, the vehicle broke down on 28.5.2023, and it only resumed its onward journey. The vehicle was intercepted and show cause notice was issued on 4.6.2023 which was replied by the petitioner accompanying the affidavit of driver of the vehicle however being not satisfied with the reply, a penalty was imposed.

Issue –

• Whether the imposition of penalty is valid after the expiry of E-way bill?

Order –

• The Single Bench of Hon’ble High observed that once the e-way bill has been generated and same has not been cancelled by the petitioner within the time prescribed under the Act, the movement of goods as well as genuineness of transaction in question cannot be disputed.
• The goods in question could not reach to its destination due to the breakdown of vehicle as stated above and after repair, the vehicle was ready for its onward journey but the same was intercepted in the intervening night of 2/3.6.2023. Since the authorities below have not recorded a finding that there was any intention of the petitioner to evade the payment of tax, the penalty is not justified.
• Hence the fact remains that vehicle could not reach its destination within the time mentioned in the e-way bill as the situation is beyond control of the petitioner as mentioned in the affidavit of driver of the vehicle and there was also no intention of the petitioner to evade the payment of tax, thus the impugned orders are not justified in the eyes of law and are liable to be quashed.
• The authorities below are directed to refund the amount, if any, deposited. The writ petition is allowed.