17 June 2024


Judgments

High Court of Allahabad

Indeutsch Industries Private Limited vs. State Of U.P. And Others (Neutral Citation:2024:AHC:28307)

MANU/UP/0416/2024

19.02.2024

Goods and Services Tax

Initial burden of proof lies on the Department to show Assessee’s intention to evade tax, when the error in the documents is only typographical error

Present is a petition under Article 226 of the Constitution of India, 1950 wherein the writ Petitioner is aggrieved by the order passed in appeal and the order imposing penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017.

In the present transaction, goods were moving from a SEZ Unit to Domestic Traffic Area and the said goods have been checked by the Custom authorities. Custom duty and also IGST had been paid on the said goods. The said goods were intercepted only two-three hours after the goods have left the SEZ Unit, and therefore, it cannot be said that this e-way bill was wrongly being used. It is a fact that the burden of proof lies on the Petitioner in certain cases to show that there was no evasion of tax. However, when the error in the documents is only that of a clerical or typographical error, the initial burden of proof lies on the department to show there was intention to evade tax. In the present case the department has failed to do so and infact has not even tried to do so.

The documents produced by the Petitioner at the time of interception indicate that the goods have been transported from a SEZ Unit to the DTA after payment of custom duty and payment of IGST. This fact has not been discredited by the department. There is complete silence with regard to the fact whether the petitioner had made the payment as indicated in the invoices and the bill of entry. The department has accordingly failed to shift the burden of proof on the Petitioner as the only error found by the department was that the vehicle number was incorrect. Apart from this one error in the e-way bill, nothing has been shown by the department to justify the imposition of penalty under Section 129(3) of the Act. The impugned order also failed to take into account the document produced by the Petitioner of the transporter wherein the explanation was given with regard to the reason for the mistake of the vehicle number in the e-way bill.

Intention to evade tax is sine qua non before imposition of penalty. In present case, the department has failed to establish any such intention. Furthermore, the Appellate Authority has failed to look into all the documents that were produced by the Petitioner to rebut the allegation of the department with regard to intention to evade tax. Impugned orders are quashed and set aside. Petition allowed.

Tags : Penalty Imposition Legality

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