Allahabad High Court

M/S Kent Cables Pvt. Ltd. vs State Of U.P. And 2 Others on 15 September, 2025

Author: Piyush Agrawal

Bench: Piyush Agrawal





HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


Neutral Citation No. - 2025:AHC:164054
 

 
HIGH COURT OF JUDICATURE AT ALLAHABAD 
 
WRIT TAX No. - 1372 of 2019   
 
   M/S Kent Cables Pvt. Ltd.    
 
  .....Petitioner(s)   
 
 Versus  
 
   State Of U.P. And 2 Others    
 
  .....Respondent(s)       
 
   
 
  
 
Counsel for Petitioner(s)   
 
:   
 
Nishant Mishra   
 
  
 
Counsel for Respondent(s)   
 
:   
 
C.S.C.   
 
     
 
 Court No. - 7
 
   
 
 HON'BLE PIYUSH AGRAWAL, J.

1. Heard Sri Nishant Mishra, learned counsel for the petitioner and the learned ACSC.

2. Present writ petition has been filed assailing the order dated 16.9.2019 passed by the Additional Commissioner, Grade-2 (Appeal), Commercial Tax, Ghaziabad.

3. Learned counsel for the petitioner submits that the petitioner is a registered dealer and engaged in the business of electronic goods and cables. He further submits that in normal course of business the petitioner sold cables/ electronic goods to M/s Alam Electricals, Sultanpur and the same were transported from Delhi to Sultanpur. The goods in question were intercepted on the ground that against four tax invoices only one e-way bill no. 731025820574 dated 22.8.2018 was generated. He further submits that the objection has been taken by the respondent authorities that in one of invoices the date has been mentioned as 20.8.2018 whereas in other three invoices, date has been mentioned as 21.8.2018, therefore, they are not appropriately accounted for. He further submits that the explanation was submitted, not being satisfied, seizure order under section 129(3) was passed for release of the vehicle, against which an appeal was filed but without considering the material on record the same has been dismissed, hence the present writ petition.

4. He submits that section 68 of the Act empowers the respondent authorities for inspection of the goods in movement. He further submits that Rule 138 A of the CGST Rules prescribes the documents to be accompanied during movement, whereas Rule 138 of the Rules prescribes the requirement of the documents to accompanied the goods with the value of more than Rs. 50,000/- in relation to the supply. He further submits that once all documents were accompanied the goods, there was no intent to evade payment of tax. For a technical error in not issuing separate e-way bills no proceedings should be initiated against the petitioner, as there is no intent to evade payment of tax. He further submits that once the e-way bills were accompanying the documents there cannot be any concealment of fact or contravention of the material on record. In support of his submission he has relied upon the judgment of this Court in Vishnu Singh vs. State of U.P. (2025) 28 Centax 384 (Alld.).

5. Per contra, learned ACSC supports the impugned order and submits that Rule 138 A of the Rules provides that for every invoice independent e-way bill must be issued. He refers Rule138(1) of the Rules and submits that in relation to the supply separate e-way bill is required, therefore, the impugned order is correct as the petitioner has contravened the provisions of the Act.

6. After hearing the learned counsel for the parties, the Court has perused the record.

7. It is not in dispute that the goods while moved from Delhi to Sultanpur were intercepted and at the time of interception, e-way bills, tax invoices, GR were available. There is no difference in quantity and items of the goods disclosed in the tax invoices. The only defect found was that for four tax invoices, one e-way bill was issued on 22.8.2018. Also, in one of the found invoices, the date has been mentioned as 20.8.2018 and in other three tax invoices the date has been mentioned as 21.8.2018. Record shows that total value of four tax invoices has been clubbed together and mentioned against the value of the goods on the e-way bill.

Under the GST regime, every documents are available on the Government portal. The purpose of e-way bill is to let the department know that the particular movement of goods were undertaken by the registered dealer, so that at the time of making assessment, no escapement of tax can be done. It is nobody's case that after issuance of e-way bill, the same was cancelled or after seizure the same was cancelled within the prescribed period therein. Once e-way bill was accompanying the goods, intend to evade payment of tax cannot be attributed to the petitioner. It is apparently a technical error for which the petitioner should not be penalised until and unless there is cogent material to show that the petitioner has an intention to evade payment of tax.

8. This Court in paragraph nos. 9 and 10 of Vishnu Singh (supra) has observed as under:

"9. Further, the record shows that no finding has been recorded with regard to intention to evade payment of tax, which is essential for levying penalty. The human error, which has been committed while generating the e-way bill, cannot be the only ground for justifying initiation of proceedings under section 129 of the GST Act.

10. The purpose of e-way bill is that the Department should know the movement of goods. This Court in M/s Zhuzoor Infratech Private Limited (supra) has held as under:-

"11. The Court is of the opinion that e-way bill is the document which is generated and accompanying the goods in transit, so that department may come to know about the movement of goods from one place to another place. So that at the time of passing final assessment, the particular transaction may not escape from levy of tax as per the prevalent provisions, under the GST Act.

12. Further, the e-way bill can be cancelled within its validity as provided under the Act. The case in hand, the e-way bill was automatically generated on 14.12.2022, which was valid up to 16.12.2022. In the present case, the e-way bill has not been cancelled within its validity, therefore, no adverse view can be taken against the petitioner that if the goods were not intercepted, transaction in question could have escape to assessment.

13. This Court in the case of M/s Sun Flag Iron and Steel Company Limited Vs. State of UP and others; Neutral Citation No. 2023:AHC:215906 has held that the purpose of e-way bill is that the department should know the actual movement of the goods and once the e-way bill is not cancelled within the prescribed period, the genuineness of the transaction cannot be questioned. Relevant paragraph of the said judgement is quoted hereunder:

11. Under the G.S.T. regime, all the details are available on the G.S.T. portal and it is admitted that e-tax invoice was raised and e-way bill was generated and the same was not cancelled within 24 hours as provided under the Act. Once the said fact is not disputed and the petitioner has not exercised its right either to withdraw the tax invoice or e-way bill in question, it was well within the knowledge of the department that movement of the goods in question has been undertaken by the petitioner. Merely on the technical ground that e-way bill accompanying with the goods in question was expired on 1.6.2023 whereas the vehicle had been intercepted in the intervening night of 2/3.6.2023.

12. The purpose of e-way bill is that the department should know the movement of goods. Once the e-way bill has been generated and same has not been cancelled by the petitioner within the time prescribed under the Act, the movement of goods as well as genuineness of transaction in question cannot be disputed. ??.

14. Thus, merely on technical ground that in the e-way bill accompanying with the goods in question, the place of shipment has wrongly been mentioned, the seizure or levy of penalty cannot be made.

15. In view of aforesaid fact and circumstances of the case, the proceedings initiated against the petitioner is not justified in the eyes of law. "

9. Record shows that no finding with regard to intention of the petitioner to evade payment of tax has been recorded by any of the authorities.

10. In view of the above, the impugned order cannot be sustained and is hereby quashed. Any amount deposited by the petitioner shall be released in accordance with law.