# M/s Akhilesh Traders Pratapgarh v. State of U.P. & Ors

- **Citation:** (2024) 3 ILRA 1809
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-02-20
- **Case number:** Writ Tax No. 1109 of 2019
- **Bench:** Shekhar B. Saraf
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-akhilesh-traders-pratapgarh-v-state-of-u-p-ors-51622
- **Pages:** 3

## Headnote

The Goods and Services Tax (GST) Act,
2017-
Section
129(3)
-
goods
were
intercepted - no E-Way Bill, invoice and bility
were present in the vehicle at the time of
interception
-
documents
were
produced
subsequent to interception - contravention of
the Rules cannot be treated to be a mere
technical or typographical mistake - when
goods are not accompanied by invoice or E-Way
1810 INDIAN LAW REPORTS ALLAHABAD SERIES
Bill, a presumption may be raised that there is
an intention to evade tax - burden of proof
shifts to the assessee - petitioner has not been
able to rebut the presumption of evasion of
taxes - absence of invoice and E-Way Bill not
explained
-
production
of
documents
subsequent to interception cannot absolve the
petitioner from liability of penalty - purpose of
imposing penalty is to act as a deterrent - if
goods
had
not
been
intercepted,
the
Government would have been out of its pocket
with respect to the GST payable - no
interference required.

Writ Petition dismissed. (E-9)

Cases Cited:

## Text

3 All. M/s Akhilesh Traders Pratapgarh Vs. State of U.P. & Ors.
1809
rebuttable by the materials to be provided
by the owner/transporter of the goods.

8. In the present case, one comes
to an inexorable conclusion that the
petitioner has not been able to rebut the
presumption of evasion of taxes, as he has
not been able to explain the absence of
invoice and the E-Way Bill. Production of
these
documents
subsequent
to
the
interception cannot absolve the petitioner
from the liability of penalty as the very
purpose of imposing penalty is to act as a
deterrent to persons who intend to avoid
paying taxes owed to the Government. It is
clear that if the goods had not been
intercepted, the Government would have
been out of its pocket with respect to the
GST payable on the said goods."

10. The petitioner, in the present case,
could not explain the absence of invoice
and e-way bill with a proper and reasonable
explanation. Ergo, he has not been able to
rebut the presumption of evasion of tax.

11. Mere furnishing of the documents
subsequent to the interception can not be a
valid ground to show that there was no
intention to evade tax. There must be some
reasonable grounds to justify the nonproduction of documents at the proper time.

12. Furthermore, the judgments upon
which the petitioner is relying are prior to
April 2018, when there were actually some
difficulties with the generation of e-way
bill. But after April, 2018 those difficulties
have been resolved and now there is no
difficulty in generating and downloading
the e-way bill.

13. The argument raised by the
counsel appearing on behalf of the
petitioner that the vehicle was parked at the
godown for unloading is not supported by
the facts. The interception of the vehicle
was in a place away from the godown and
this entire argument is obviously an
afterthought. Accordingly, the application
of Section 129(3) of the Act by the
authorities is valid and just in law.

14. In light of the above, I am of the
view that the petitioner herein has not
complied with the provisions of law, hence
the
steps
taken
by
the
respondent
authorities are proper and in accordance
with the law and require no interference by
this court.

15. Accordingly the writ petition is
dismissed.
----------
(2024) 3 ILRA 1809
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 20.02.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Writ Tax No. 1109 of 2019

M/s Akhilesh Traders Pratapgarh
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Pranjal Shukla

Counsel for the Respondent:
C.S.C.

The Goods and Services Tax (GST) Act,
2017-
Section
129(3)
-
goods
were
intercepted - no E-Way Bill, invoice and bility
were present in the vehicle at the time of
interception
-
documents
were
produced
subsequent to interception - contravention of
the Rules cannot be treated to be a mere
technical or typographical mistake - when
goods are not accompanied by invoice or E-Way
1810 INDIAN LAW REPORTS ALLAHABAD SERIES
Bill, a presumption may be raised that there is
an intention to evade tax - burden of proof
shifts to the assessee - petitioner has not been
able to rebut the presumption of evasion of
taxes - absence of invoice and E-Way Bill not
explained
-
production
of
documents
subsequent to interception cannot absolve the
petitioner from liability of penalty - purpose of
imposing penalty is to act as a deterrent - if
goods
had
not
been
intercepted,
the
Government would have been out of its pocket
with respect to the GST payable - no
interference required.

Writ Petition dismissed. (E-9)

Cases Cited:

1. M/s Axpress Logistics India Private Limited v.
Union of India and others, Writ Tax No. 602 of
2018, decided on 09.04.2018 (Allahabad High
Court, Division Bench).

2. M/s Modern Traders v. State of U.P. and
others, Writ Tax No. 763 of 2018, decided on
09.05.2018 (Allahabad High Court, Division
Bench).

3. M/s Falguni Steels v. State of U.P. and others,
Writ Tax No. 146 of 2023, decided on
25.01.2024 (Allahabad High Court).

(Delivered by Hon'ble Shekhar B. Saraf, J.)

1. Heard Sri Pranjal Shukla, learned
counsel appearing on behalf of the
petitioner and Sri Ravi Shanker Pandey,
learned Additional Chief Standing Counsel
appearing on behalf of the State.

2. This is a writ petition under Article
226 of the Constitution of India, wherein
the petitioner is aggrieved by the order
imposing penalty dated August 8, 2018
passed
by
respondent
No.4/Assistant
Commissioner, Commercial Tax, Mobile
Squad Unit-4, Prayagraj under Section
129(3) of the Uttar Pradesh Goods and
Services Act, 2017 (hereinafter referred to
as "the Act") and the order dated August
20, 2019 passed in appeal by respondent
No.3/Additional Commissioner, Grade-2
(Appeal) 3rd, Commercial Tax, Prayagraj.

3. The undisputed facts in the present
case are that the goods were intercepted
and upon interception, no E-Way Bill,
invoice and bility were present in the
vehicle carrying the goods. Subsequent to
the interception, these documents were
produced by the assessee.

4. Sri Pranjal Shukla has relied upon
the Division Bench judgments of this Court
rendered in M/s Axpress Logistics India
Private Limited v. Union of India and
others (Writ Tax No.602 of 2018 decided
on April 9, 2018) and M/s Modern Traders
v. State of U.P. and others (Writ Tax
No.763 of 2018 decided on May 9, 2018)
to argue that when the documents are
produced after the interception and before
the detention order is passed, no penalty is
leviable under Section 129(3) of the Act.
He further relies upon paragraph Nos.19
and 20 of the Single Bench judgment of
this Court in M/s Falguni Steels v. State of
U.P. and others (Writ Tax No.146 of 2023
decided on January 25, 2024) to buttress
his argument that the intention to evade tax
must be present and it is the duty of the
Department to indicate such intention to
evade tax.

5. Sri R.S. Pandey has submitted that
the judgments relied upon by the learned
counsel for the petitioner relate to the
period where the detention of goods was
prior to April 2018. He further submitted
that in instances of detention that occurred
subsequent to April 2018, the E-Way Bill is
mandatory and is required to be carried
along with the goods. In the present case,
he submits that neither the E-Way Bill nor
3 All. M/s DECO PLYWOOD INDUS. Vs. State of U.P. & Ors.
1811
even invoice and bility were accompanying
the goods at the time of interception. He,
accordingly, submits that the burden of
proof with regard to intention to evade tax
shifts from the Department to the assessee.

6. In the present case, the facts are
undisputed that neither invoice nor E-Way
Bill were accompanying the goods. Such a
contravention to the Rules cannot be
treated to be a mere technical or
typographical mistake, and accordingly, in
such cases, the burden of proof for
establishing that there was no mens rea for
evasion of taxes shifts to the assessee.

7. This Court in umpteen cases where
penalties
were
being
imposed
under
Section 129 of the Act though held that an
intention to evade tax should be present,
however, in the event the goods are not
accompanied by the invoice or the e-way
bill, a presumption may be raised that there
is an intention to evade tax. Such a
presumption of evasion of tax then
becomes rebuttable by the materials to be
provided by the owner/transporter of the
goods.

8. In the present case, one comes to an
inexorable conclusion that the petitioner
has not been able to rebut the presumption
of evasion of taxes, as he has not been able
to explain the absence of invoice and the EWay Bill. Production of these documents
subsequent to the interception cannot
absolve the petitioner from the liability of
penalty as the very purpose of imposing
penalty is to act as a deterrent to persons
who intend to avoid paying taxes owed to
the Government. It is clear that if the goods
had not been intercepted, the Government
would have been out of its pocket with
respect to the GST payable on the said
goods.

9. In light of the above findings, no
interference is required with regard to the
impugned orders. The writ petition is,
accordingly, dismissed.
----------
(2024) 3 ILRA 1811
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.03.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Writ Tax No. 1136 of 2022

M/s DECO PLYWOOD INDUS. ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Shubham Agrawal

Counsel for the Respondent:
C.S.C.

The Goods and Services Tax (GST) Act,
2017- Section 129 - duly registered dealer -
supplying plywood - transaction duly covered by
a tax invoice, a bilty and e-way bill - goods in
transit intercepted - seizure order passed on the
ground that the document/invoice number has
wrongly been mentioned in the e-way bill - no
other infraction - no allegation of any attempt
for evasion of tax - e-way bill, bilty and tax
invoice were matching - consignee was also a
registered
dealer
-
typing
of
the
document/invoice number - difference of four
digits - typographical error - law is not to
remain in a vacuum and has to be applied
equitably - presence of mens rea for evasion of
tax is a sine qua non for imposition of penalty -
imposition of penalty under Section 129 of the
Act is without jurisdiction and illegal in law -
impugned orders quashed and set-aside .

Writ petition allowed. (E-9)