Penalty Imposed for Non-Availability of Delivery Challans was Disproportionate As There Was No Tax Evasion | HC

Case Details: Prestress Steel LLP v. Commissioner, Uttarakhand State GST - [2023] 157 taxmann.com 112 (Uttarakhand)

Judiciary and Counsel Details

• Ravindra Maithani, J.
• Harshit Sanwal, Adv. for the Petitioner.
• Mohit Molekhi for the Respondent.

Facts of the Case

The assessee was engaged in business of manufacturing PC wires. It transported consignments using two vehicles and vehicles were intercepted by Revenue Authorities. It was found that the required delivery challans were not available and penalties were imposed. It filed writ petition and contended that the imposed penalties were illegal and disproportionate, as non-availability of delivery challans with vehicles was a procedural impropriety and did not involve tax evasion.

The Revenue Authority contended that procedural requirements could not be condoned as they are necessary to prevent fraud, escape, leakage, and administrative inconveniences.

High Court Held

The Honorable High Court noted that at the time of interception, the in-charge vehicles were not carrying delivery challans but the petitioner had generated e-way bills pertaining to both the vehicles. The Court further noted that it was not a case that the delivery challan was not taken with the intention to evade the tax.

Therefore, the Court held that the penalties imposed on assessee were disproportionate and could be rectified as an error as there was no evasion of tax and the Authorities should have proceeded under Section 122 instead of proceeding under Section 129 of GST Act, 2017.