Detention and Penalty Under Section 129(3) Not Sustainable When Photocopy of Invoice and Valid E-Way Bill Were Available | HC
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Case Details: Satyam Traders vs. State of U.P. - [2025] 173 taxmann.com 481 (Allahabad)
Judiciary and Counsel Details
- Shekhar B. Saraf & Kshitij Shailendra, JJ.
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Praveen Kumar, for the Petitioner.
Facts of the Case
The petitioner, a goods transporter, was subjected to the detention of goods and imposition of penalty under Section 129(3) of the Central Goods and Services Tax Act, 2017, by the authorities during transit. The authorities noted that the original invoice was not available with the goods. However, the petitioner had a photocopy of the invoice, and the e-way bill was correctly generated and matched with the invoice details. Upon inspection, the weight of the goods was found to be 1% higher than the weight mentioned in the invoice. The petitioner explained that the discrepancy was due to rainwater accumulation on the goods, which had increased the weight. The authorities accepted this explanation but imposed a penalty solely due to the absence of the original invoice. The petitioner then filed a petition before the Allahabad High Court, challenging the detention and penalty.
High Court Held
The Hon’ble Allahabad High Court held that the detention and penalty under Section 129(3) were not sustainable. The Court observed that the photocopy of the invoice, along with the matching e-way bill, demonstrated that there was no intention to evade tax. The minor discrepancy in the weight, which was explained as a result of rainwater, did not indicate any fraudulent intent. The Court further emphasized that the petitioner had complied with the necessary documentation and there was no mens rea to evade tax. As a result, the detention and penalty proceedings were deemed arbitrary and invalid, and the Court ruled in favor of the petitioner, setting aside the order under Section 129(3).
List of Cases Referred to
- Asstt. Commissioner (ST) And Others v. Satyam Shivam Papers Private Limited And Another (2022) 14 SCC 157 (para 7).
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