Intention to Evade Tax is a Prerequisite for Imposing a Penalty u/s 129 | Allahabad HC

Case Details: Bhawani Traders v. State of U.P. - [2023] 153 taxmann.com 86 (Allahabad)

Judiciary and Counsel Details

• • Pritinker Diwaker, CJ. & Ashutosh Srivastava, J.
  • Shubham Agrawal for the Petitioner.
  • C.S.C. for the Respondent.

Facts of the Case

The department passed penalty order upon the petitioner by not treating the petitioner to be the owner of goods. It filed writ petition against the order and contended that the goods were duly accompanied by the tax invoice, e-way bill and bilty issued in the name of the petitioner as the consignor but the department passed penalty order under section 129(1) (b) of CGST Act, 2017.

High Court Held

The Honorable High Court observed that penalty was imposed under section 129(1)(b) and the petitioner was not considered owner of goods in transit from Kolkata to New Delhi, despite possessing valid documents. The Court further noted that intention to evade tax is a prerequisite for imposing a penalty under section 129.

In the present case, e-way bills being the documents of title to the goods were accompanying the goods. Therefore, it was held that the conclusion of the department that the petitioner was not the owner of the goods was patently erroneous.