Penalty Shouldn’t be Imposed If Vehicle Was Carrying Valid E-way Bill But Not Reached Destination Due to Breakdown | HC

Case Details: Sun Flag Iron and Steel Co. Ltd. v. State of U.P. - [2023] 156 taxmann.com 554 (Allahabad)

Judiciary and Counsel Details

• • Piyush Agrawal, J.
  • Shubham Agarwal for the Petitioner.
  • C.S.C. for the Respondent.

Facts of the Case

The petitioner was engaged in the business of manufacturing & sale of basic iron and steel etc. In the normal course of business the petitioner dispatched the consignment and goods were accompanied with e-tax invoice, e-way bill valid up to 1-6-2023. During transit, the vehicle got struck in mud and with help of crane same was pulled out but vehicle engine could not start. The driver contacted mechanic for removing defect/breakdown and went to Jhansi for purchase of spare parts.

In the meanwhile, the vehicle was intercepted and show cause notice was issued on ground that e-way bill accompanying with goods in question, was expired on 1-6-2023. The petitioner replied to notice but the department passed order imposing penalty on petitioner and it filed writ petition against the demand order.

High Court Held

The Honorable High Court noted that the vehicle could not reach its destination within time mentioned in e-way bill as situation was beyond control of petitioner. Moreover, there was no intention of petitioner to evade payment of tax and thus, the levy of penalty was not justified. Therefore, the Court held that the impugned order was liable to be quashed and revenue authority was directed to refund amount, if any, deposited by petitioner.

List of Cases Reviewed

• • Shyam Sel & Power Ltd. v. State of U.P. [2023] 155 taxmann.com 145 (Allahabad) (Para 13)
  • Bhawani Traders v. State of U.P. [2023] 153 taxmann.com 86 (Allahabad) (Para 14)
  • Raghav Metals v. State of Haryana [2022] 141 taxmann.com 179 (Punjab & Haryana) followed.