# M/s Globe Panel Indus. India Pvt. Ltd v. State of U.P. & Ors

- **Citation:** (2024) 3 ILRA 1784
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-02-05
- **Case number:** Writ Tax No. 141 of 2023
- **Bench:** Shekhar B. Saraf
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-globe-panel-indus-india-pvt-ltd-v-state-of-u-p-ors-51618
- **Pages:** 3

## Headnote

The Goods and Services Tax (GST) Act,
2017 - Section 129(3) - Expired E-Way Bill -
vehicle accompanied by two e-Invoices and two
E-Way Bills - goods matched description,
quantity and value - no dispute regarding
consignor or consignee - only one E-Way Bill
found expired at the time of detention -
explanation of vehicle breakdown supported by
mechanic's
letter
and
FASTag
movement
records
-
documents
not
considered
by
authorities - no material to establish mens rea
or intention to evade tax - technical violation by
itself not sufficient to impose penalty - penalty
cannot be levied merely for non-compliance with
procedural requirements in absence of tax
evasion - reliance placed on earlier High Court
decisions holding mens rea to be essential for
levy of penalty under Section 129(3) - orders
passed on surmises and conjectures - penalty
order and appellate order unsustainable in law -
orders quashed - refund of tax and penalty
directed.

Writ petition allowed. (E-9)

Cases Cited:

## Text

1784 INDIAN LAW REPORTS ALLAHABAD SERIES
----------
(2024) 3 ILRA 1784
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.02.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Writ Tax No. 141 of 2023

M/s Globe Panel Indus. India Pvt. Ltd.
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Shubham Agrawal

Counsel for the Respondent:
Sri Rishi Kumar,Addl. C.S.C.

The Goods and Services Tax (GST) Act,
2017 - Section 129(3) - Expired E-Way Bill -
vehicle accompanied by two e-Invoices and two
E-Way Bills - goods matched description,
quantity and value - no dispute regarding
consignor or consignee - only one E-Way Bill
found expired at the time of detention -
explanation of vehicle breakdown supported by
mechanic's
letter
and
FASTag
movement
records
-
documents
not
considered
by
authorities - no material to establish mens rea
or intention to evade tax - technical violation by
itself not sufficient to impose penalty - penalty
cannot be levied merely for non-compliance with
procedural requirements in absence of tax
evasion - reliance placed on earlier High Court
decisions holding mens rea to be essential for
levy of penalty under Section 129(3) - orders
passed on surmises and conjectures - penalty
order and appellate order unsustainable in law -
orders quashed - refund of tax and penalty
directed.

Writ petition allowed. (E-9)

Cases Cited:

1. M/s Hindustan Herbal Cosmetics v. State of
U.P. and Others, Writ Tax No. 1400 of 2019,
decided on 02.01.2024 (Allahabad High Court).

2. 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).

3. M/s Pepsico India Holdings Limited, Lucknow
v. Commissioner of Trade Tax, 2003 U.P.T.C.
856.

4. Jain Shudh Vanaspati Limited, Ghaziabad and
Others v. State of U.P. and Others, 1983
U.P.T.C. 198.

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

1. This is a writ petition under Article
226 of the Constitution of India wherein the
petitioner is aggrieved by the penalty order
dated January 16, 2023 passed by the
respondent No.3/Assistant Commissioner,
State Tax Department, Sector 1, Mobile
Squad, Deoria under Section 129(3) of the
Uttar Pradesh Goods and Services Tax Act,
2017 (hereinfater referred to as "the Act")
and the appellate order dated January 30,
2023
passed
by
the
respondent
No.2/Additional Commissioner, Grade-2
(Appeal)-I, State Tax, Judicial Division,
Gorakhpur.

2. Learned counsel appearing on
behalf of the petitioner submitted that the
particular vehicle was accompanied by two
e-Invoices and two E-Way Bills. He further
submitted that the goods matched the
description in the e-Invioices and the EWay Bills. The only descrpency that was
found at the time of detention was that one
of the E-Way Bills had expired. Apart from
this discrepancy, there is no other finding
with regard to intention of the petitioner to
evade tax. He relied upon the documents to
indicate that the vehicle had broken down.
The same is evidenced by the letter of the
3 All. M/s Globe Panel Indus. India Pvt. Ltd. Vs. State of U.P. & Ors.
1785
mechanic, who had repaired the particular
vehicle. Furthermore, the movement of the
goods have been traced by way of the 'fast
tag' chart. He further submits that none of
these documents were considered by the
authorities. He further relies upon the
judgments in M/s Pepsico India Holdings
Limited Lucknow v. Commissioner of
Trade Tax reported in 2003 U.P.T.C. 856
and Jain Shudh Vanaspati Limited
Ghaziabad and Others v. State of U.P.
and Others reported in 1983 U.P.T.C. 198
to buttress his arguments that the penalty
cannot be imposed merely for the reason
that the said goods were not accompanied
by requisite documents.

3. Learned Additional Chief Standing
Counsel submitted that the E-Way Bill is
the necessary part of the documents and the
expired E-Way Bill does not fullfil the
requirments of the Rules. He further
submitted
that
the
authorities
have
considered the arguments raised by the
petitoner and the orders indicate that the EWay Bill has expired ten days before the
date of detention. He further submitted that
the petitioner could not explain the reason
for not issuing a fresh E-Way Bill even
though it was obvious that the petitoner
was aware of the said expiry. He thus
submitted that the penalty was in order.

4. This Court in M/s Hindustan Herbal
Cosmetics v. State of U.P. and Others
(Writ Tax No.1400 of 2019 decided on
January 2, 2024) and M/s Falguni Steels v.
State of U.P. and Others (Writ Tax
No.146 of 2023 decided on January 25,
2024) held that mens rea to evade tax is
essential for imposition of penalty. The
factual aspect in the present case did not
indicate any intention whasoever to evade
tax. Furthermore, the documents that have
been relied upon by the petitioner have not
been considered by the authorities. The
authorities have dealt with the issue with
regard to the expiry of the E-Way Bill and
held that no explanaiton was offerred by
the petitioner with regard to the fresh
generation of the E-Way Bill, as the same
had expired ten days before the detention.
However, it is to be noted that the goods in
the vehicle were for two e-Invoices and two
E-Way Bills and only one E-Way Bill had
expired. There is no dispute with regard to
the consignor and consignee nor any
dispute with regard to the description of the
goods in the vehicle. In relation to the eInvoices
and
the
E-Way
Bills,
the
authorities have not been able indicate any
intention whatsoever on behalf of the
petitioner to evade tax. Indubitably, there is
a
technical
violation
that has been
committed by the petitioner. However, the
authorities have not been able to indicate in
any manner that the E-Way Bill had been
used repeatedly nor have they made out any
case with regard to an intention to evade
tax by the petitioner. Accordingly, this
Court is of the view that such a technical
violation by itself without any intention to
evade tax cannot lead to imposition of
penalty under Section 129(3) of the Act.
This view is fortified by a catena of
judgments as indicated above.

5. In light of the same, this Court is
unable to agree with the findings of the
authorities, and accordingly, the impugned
orders dated January 16, 2023 and January
30, 2023 are quashed and set aside.

6. This Court directs the respondents
to refund the amount of tax and penalty
deposited by the petitioner within a period
of four weeks from date.
1786 INDIAN LAW REPORTS ALLAHABAD SERIES

7. The instant writ petition is allowed
in aforesaid terms. There shall be no order
as to the costs.
----------
(2024) 3 ILRA 1786
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.02.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Writ Tax No. 542 of 2023

M/s Genius Ortho. Indus., Ghaziabad
 ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Hari Shanker Srivastava, Sri Nikhil Srivastava

Counsel for the Respondent:
Sri Sudharshan Singh, Sri Amit Mahajan

Constitution of India,1950 Article 226 -
writ petition - cancellation of GST registration
- physical verification - no business activity
being carried out at the premises - show cause
notice - appeal dismissed - new registration
obtained
subsequent
to
cancellation
-
suppression of material fact - no averment in
the writ petition - Court hoodwinked - sheer
wastage of time of the authorities - fraud -
fraudulent concealment - doctrine of clean
hands - suppression of material facts -
discretionary jurisdiction - petitioner not acting
in good faith - writ petition dismissed - liberty
to approach any other forum.

Writ petition dismissed. (E-9)

Cases Cited:

1. Bhriguram De v. State of West Bengal and
others, (2018) SCC OnLine Cal 8141.

2. S.J.S. Business Enterprises (P) Ltd. v. State of
Bihar, (2004) 7 SCC 166.
3. S.P. Chengalvaraya Naidu (Dead) by LRs v.
Jagannath (Dead) by LRs, (1994) 1 SCC 1.

4. Chittaranjan Das v. Durgapore Project Ltd.,
99 C.W.N. 897.

5. Asiatic Engineering Co. v. Achhru Ram, AIR
1951 Allahabad 746 (FB).

6. Indian Bank v. Satyam Fibres (India) Pvt.
Ltd., (1996) 5 SCC 550.

7. The King v. Williams, (1914) 1 K.B. 608.

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

1. Heard learned counsel appearing on
behalf of the petitioner, Sri Sudarshan
Singh, learned counsel appearing on behalf
of respondent No.1 and Sri Amit Mahajan,
learned counsel appearing on behalf of
respondent Nos. 2 and 3.

2. Physical verification report filed by
the learned counsel for the respondents in
Court today be kept on record.

3. This is a writ petition under Article
226 of the Constitution of India wherein the
petitioner is aggrieved by the order dated
February 27, 2023 passed by the Joint
Commissioner, C.G.S.T. (Appeal), Meerut
cancelling its GST registration.

4. The ground for cancelling the GST
registration of the petitioner was that upon
physical verification, it was found by the
authorities that no business activity was
being carried out at the said premises.
Authorities also called the proprietor on
several occasions but his phone was
switched off and he did not picked up the
calls. A show cause notice was issued by
the Department, which was replied by the
petitioner and subsequently the order
cancelling the registration was passed.
Against the order cancelling registration,