Court quashes penalty for expired e-way bill, upholds no intention of tax evasion.

Case Name:

WPA 22612 of 2023 - M/s. Ishaan Plastics Pvt. Ltd. & Anr. vs. The Deputy Commissioner of State Tax Bureau of Investigation (South Bengal) Durgapur Zone & Ors.

Key Takeaways:

- The court emphasized the absence of any deliberate or willful intention by the petitioner to evade tax. - Relying on its previous orders, the court held that the time gap between the expiry of the e-way bill and the interception of the vehicle was not significant enough to warrant the penalty. - The impugned orders of the appellate and adjudicating authorities were set aside, and the petitioner was entitled to a refund of the penalty. **Issue:** Whether the penalty imposed for transporting a vehicle after the expiry of the e-way bill was justified, considering the time gap between the expiry and interception and the absence of any intention to evade tax. **Facts:** - The petitioner challenged the impugned order of the appellate authority under the WBGST Act, confirming the order of the adjudicating authority imposing a penalty. - The penalty was imposed for transporting the vehicle in question after the expiry of the e-way bill, which expired on December 27, 2022, at 11:59 p.m. - The vehicle was intercepted at 8:37 a.m. on December 28, 2022, approximately 9 hours after the expiry of the e-way bill. - The petitioner argued that there was no intention of tax evasion, and the time gap between the expiry and interception was less than a day. **Arguments:** - Petitioner's Argument: The petitioner relied on two previous orders of the High Court (dated March 1, 2022, in WPA No. 11085 of 2021, and May 12, 2022, in MAT No. 470 of 2022) to support the contention that the time gap between the expiry of the e-way bill and the interception of the vehicle was not significant enough to warrant the penalty, and there was no intention of tax evasion. - Respondents' Argument: The respondents could not make out a case against the petitioner that there was any deliberate or willful intention to avoid and evade tax. **Key Legal Precedents:** - Order dated March 1, 2022, in WPA No. 11085 of 2021 (Ashok Kumar Sureka – Vs – Assistant Commissioner, State Tax, Durgapur Range) - Division Bench decision dated May 12, 2022, in MAT No. 470 of 2022 **Judgement:** - Considering the facts and circumstances of the case, and relying on the two previous orders of the High Court, the court disposed of the writ petition by setting aside the impugned order of the appellate authority and the adjudicating authority. - As a consequence, the petitioner was entitled to a refund of the penalty, subject to compliance with legal formalities. - The court observed that there was no deliberate or willful intention by the petitioner to avoid and evade tax. **FAQs:** 1. **What was the main issue in this case?** The main issue was whether the penalty imposed for transporting a vehicle after the expiry of the e-way bill was justified, considering the time gap between the expiry and interception and the absence of any intention to evade tax. 2. **What was the court's decision?** The court set aside the impugned orders of the appellate and adjudicating authorities and directed the refund of the penalty to the petitioner, subject to compliance with legal formalities. 3. **What was the basis for the court's decision?** The court relied on its previous orders and found that the time gap between the expiry of the e-way bill and the interception of the vehicle was not significant enough to warrant the penalty. Additionally, the court observed that there was no deliberate or willful intention by the petitioner to avoid and evade tax. 4. **What legal precedents did the court rely on?** The court relied on two of its previous orders: (1) Order dated March 1, 2022, in WPA No. 11085 of 2021 (Ashok Kumar Sureka – Vs – Assistant Commissioner, State Tax, Durgapur Range), and (2) Division Bench decision dated May 12, 2022, in MAT No. 470 of 2022. 5. **What is the significance of this case?** This case reinforces the principle that penalties should not be imposed in cases where there is no deliberate or willful intention to evade tax, and the circumstances do not warrant such action. It also highlights the importance of considering the specific facts and circumstances of each case, rather than imposing penalties mechanically.

Heard learned advocates appearing for the parties.

By this writ petition, petitioner has challenged the impugned order of the appellate authority under WBGST Act confirming the order of the adjudicating authority imposing the penalty for transporting the vehicle in question after expiry of the e-way bill which was expired on 27.12.2022 at 11.59 p.m. and the vehicle in question was intercepted at 8.37 a.m. on 28.12.2022 that there is a time gap between the expiry of the bill and interception of the vehicle in question is about 9 hrs., which is less than a day and writ petitioner submits that there was no intention of any evasion of tax on the part of the petitioner.

Learned advocate appearing for the petitioner in support of his contention relies on an order of this Court dated 1st March, 2022 in WPA No. 11085 of 2021 in the case of Ashok Kumar Sureka – Vs – Assistant Commissioner, State Tax, Durgapur Range and also a Division Bench decision of this Court dated 12th May, 2022 in MAT No. 470 of 2022.

Learned advocate appearing for the respondents could not make out any case against the petitioner that there was any deliberate or willful intention of the petitioner to avoid and evade the tax.

In view of the facts and circumstances of the case which appears from record and considering the aforesaid two orders of this Court, this writ petition being WPA 22612 of 2023 is disposed of by setting aside the aforesaid impugned order of the appellate authority and adjudicating authority and as a consequence, petitioner will be entitled to get the refund of the penalty in question subject to compliance of legal formalities.

With this observation, this writ petition being WPA 22612 of 2023 stands disposed of.

( Md. Nizamuddin, J.)