M/S Akhilesh Traders v. State Of U.P. And 3 Others

Neutral Citation No. - 2024:AHC:29040

Court No. - 1 Case :- WRIT TAX No. - 1109 of 2019 Petitioner :- M/S Akhilesh Traders Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Pranjal Shukla Counsel for Respondent :- C.S.C.

1. Heard Sri Pranjal Shukla, learned counsel appearing on behalf

of the petitioner and Sri Ravi Shanker Pandey, learned Additional

Chief Standing Counsel appearing on behalf of the State.

2. This is a writ petition under Article 226 of the Constitution of

India, wherein the petitioner is aggrieved by the order imposing

penalty dated August 8, 2018 passed by respondent No.4/Assistant

Commissioner, Commercial Tax, Mobile Squad Unit-4, Prayagraj

under Section 129(3) of the Uttar Pradesh Goods and Services Act,

2017 (hereinafter referred to as "the Act") and the order dated

August 20, 2019 passed in appeal by respondent No.3/Additional

Commissioner, Grade-2 (Appeal) 3rd, Commercial Tax,

3. The undisputed facts in the present case are that the goods

were intercepted and upon interception, no E-Way Bill, invoice

and bility were present in the vehicle carrying the goods.

Subsequent to the interception, these documents were produced by

4. Sri Pranjal Shukla has relied upon the Division Bench

judgments of this Court rendered in M/s Axpress Logistics India

Private Limited v. Union of India and others (Writ Tax No.602

of 2018 decided on April 9, 2018) and M/s Modern Traders v.

State of U.P. and others (Writ Tax No.763 of 2018 decided on

May 9, 2018) to argue that when the documents are produced after

the interception and before the detention order is passed, no

penalty is leviable under Section 129(3) of the Act. He further

relies upon paragraph Nos.19 and 20 of the Single Bench

judgment of this Court in M/s Falguni Steels v. State of U.P. and

others (Writ Tax No.146 of 2023 decided on January 25, 2024) to

buttress his argument that the intention to evade tax must be

present and it is the duty of the Department to indicate such

5. Sri R.S. Pandey has submitted that the judgments relied upon

by the learned counsel for the petitioner relate to the period where

the detention of goods was prior to April 2018. He further

submitted that in instances of detention that occurred subsequent to

April 2018, the E-Way Bill is mandatory and is required to be

carried along with the goods. In the present case, he submits that

neither the E-Way Bill nor even invoice and bility were

accompanying the goods at the time of interception. He,

accordingly, submits that the burden of proof with regard to

intention to evade tax shifts from the Department to the assessee.

6. In the present case, the facts are undisputed that neither

invoice nor E-Way Bill were accompanying the goods. Such a

contravention to the Rules cannot be treated to be a mere technical

or typographical mistake, and accordingly, in such cases, the

burden of proof for establishing that there was no mens rea for

evasion of taxes shifts to the assessee.

7. This Court in umpteen cases where penalties were being

imposed under Section 129 of the Act though held that an intention

to evade tax should be present, however, in the event the goods are

not accompanied by the invoice or the e-way bill, a presumption

may be raised that there is an intention to evade tax. Such a

presumption of evasion of tax then becomes rebuttable by the

materials to be provided by the owner/transporter of the goods.

8. In the present case, one comes to an inexorable conclusion

that the petitioner has not been able to rebut the presumption of

evasion of taxes, as he has not been able to explain the absence of

invoice and the E-Way Bill. Production of these documents

subsequent to the interception cannot absolve the petitioner from

the liability of penalty as the very purpose of imposing penalty is

to act as a deterrent to persons who intend to avoid paying taxes

owed to the Government. It is clear that if the goods had not been

intercepted, the Government would have been out of its pocket

with respect to the GST payable on the said goods.

9. In light of the above findings, no interference is required with

regard to the impugned orders. The writ petition is, accordingly,

Order Date :- 20.2.2024 Kuldeep

2024-02-22T15:19:41+0530 High Court of Judicature at Allahabad