Penalty can’t be Levied if Dept. can’t Form Opinion to Falsify Genuineness of Documents Produced by Assessee: HC

Case Details: Shahil Traders v. State of U.P. - [2023] 152 taxmann.com 24 (Allahabad)

Judiciary and Counsel Details

• • Saumitra Dayal Singh & Rajendra Kumar, JJ.
  • Aaditya Pandey for the Petitioner.
  • C.S.C. for the Respondent.

Facts of the Case

The assessee was a registered scrap trader. It dispatched certain goods from Kanpur to Ludhiana against its regular tax invoice and E-way bill. During such transportation, goods were detained by the GST authority and statement of driver of truck was recorded.

The tax invoice and E-way bill were produced at time of first interception but the authority entertained a doubt as to genuineness of consignee and issued order and levied penalty under section 129(1)(b) of GST Act, 2017. The petitioner filed writ petition and challenged the order levying penalty.

High Court Held

The Honorable High Court noted that the documents were found present on the vehicle in question at the time of its first detention and this fact was not disputed by the department. However, the GST authority had not formed any opinion to falsify genuineness of tax invoice and E-way bill claimed by the petitioner.

It was further not in dispute that petitioner claimed to be owner of goods. Thus, at most, security could have been demanded in terms of section 129(1)(a) but not under section 129(1)(b) of the GST Act, 2017. Therefore, it was held by the Court that the impugned order was liable to be set aside.