Order Date: 10 August 2022

Facts-

• The Petitioner, M/s Daya Shanker Singh is a registered government contractor received a work order from the Divisional Project Engineer of the Public Works Department (PIU), Dindori for the construction of an additional laboratory and classroom. 
• The vehicle, which was carrying TMT bars on 18.05.2022 and was traveling from Raipur to Dindori, suffered a problem and the clutch-plates of the vehicle got damaged. The proprietor of 'Maa Rewa Transport' sent a vehicle for servicing to 'Rama Moto Cooperation', Raipur, on 18/5/2022. On 19/5/2022 the vehicle was repaired and a tax invoice for changing parts was filed. The vehicle, after getting a gate pass, started movement with related documents.
• The petitioner submitted that the vehicle reached Dindori on 19.5.2022 between 10.30 and 10.45 pm, well within the time mentioned in the E-Way Bill. After reaching the destination, while the vehicle was moving towards Weigh Bridge, the Assistant Commissioner was observed that the E-way Bill expired. The vehicle was detained in the custody of the City Police Station.
• The petitioner requested that the material detained be supplied to him, which is necessary for the construction of the classroom and laboratory. The said written submission was not accepted and GST MOV-06 was issued. It was followed by GST FORM MOV-07 specifying the penalty.
• Aggrieved, this petition is filed.

Issue-

• Whether the imposition of penalty is justifiable?

Order-

• The Division Bench of Hon’ble High Court observed that the respondents could not establish that there exists any element of evasion of tax, fraudulent intent or negligence on the part of the petitioner. In this backdrop, the impugned notice/order could not have been passed.
• The Court relied on the judgment of Telangana High Court in (2021) 5 GSTJ Online 174 (TG) Satyam Shivam Papers Pvt. Ltd. vs. Asst. Commissioner, ST & others (W.P.No.9688 of 2020),and other cases wherein it was held that on account of non-extension of the validity of the E-way Bill by petitioner, no presumption can be drawn that there was an intention to evade tax.
• The principles of natural justice were statutorily recognized and ingrained in Section 126(1) (3) of the Act. In the instant case, the delay of almost 4:30 hours before which E-way Bill stood expired appears to be bonafide and without establishing fraudulent intent and negligence on the part of petitioner, the impugned notice/order could not have been passed
• The court set aside the penalty and directed the amount of penalty already deposited by the assessee to be refunded back within 30 days.
• Hence the Writ Petition is allowed.