Counsel for v. Nishant Mishra

1. Heard Ms. Vedika Nath, learned counsel for the petitioner and Sri R.S. Pandey, learned Additional Chief Standing Counsel for the State- respondents.

2. By means of instant writ petition, the petitioner has assailed the order dated 23.05.2019 passed by respondent no.2.

3. Learned counsel for the petitioner submits that the petitioner is a company which is duly registered under the GST Act, 2017 having GSTIN No.05AAACS6857L3ZW. In the normal course of business, the petitioner supplied 8285 Kg of scrap materials to one M/s Rajputana Stainless Ltd., Panchmahal, Gujarat. After preparing the tax invoice and generating the e- way bill, the goods in question was handed over to the transporter M/s Jai Ambe Freight Carrier for transportation of goods from Uttarakhand to Ghaziabad, but thereafter, the petitioner realized that by mistake, the value of goods the e-way bill mentioned as 146644.50/- instead of Rs.5,37,696.50/-, following which to rectify the error, the petitioner cancelled e-way bill and instructed the transporter to commence the transportation of goods on the next day, after generation of a fresh e-way bill. On the next day i.e. 07.04.2018, the petitioner generated a fresh e-way bill and delivered the same to the transporter, however, the petitioner was informed by the transporter that the driver had already left for delivery of goods to its destination. When the goods in question loaded on Vehicle No.HR-63-B-2126 was crossing Shamli, the same was intercepted by respondent no.3 on 07.04.2018 at 5:10 P.M. for verification of goods as well as documents accompanying the goods in question and the physical 2 WTAX No. 1035 of 2019 verification of the same was conducted wherein the quantity of the goods in question were found to be same as mentioned in the invoice, accompanying the goods in question, however, on the sole ground that the goods in question were being transported accompanying with cancelled e-way bill, respondent no.3 passed the detention order on 07.04.2018 and on the same day, a show cause notice was issued to which a detailed reply was submitted, but being dissatisfied with the same, respondent no.3 passed the order under Section 129 (3) of the UPGST Act, 2017 on 09.04.2018. Being aggrieved from the said order, an appeal was filed by the petitioner, but the same was rejected vide order dated 23.05.2009 without considering the materials available on record.

4. She further submits there was no intention to evade the payment of tax as a fresh e-way bill was generated before detention of the goods.

5. She further submits that it is not the case that the e-way bill was not there accompanying the goods, or rather the earlier e-way bill was cancelled on the premise that there was a difference on the value mentioned in the earlier e-way bill.

6. She next submits that it is not the case of the department that the goods mentioned in the tax invoice were different, rather there was some variations in the quantity of the same. Once there is no intention to evade payment of tax and the e-way bill was generated before expiry of the earlier e-way bill and the same was produced before the authorities, it ought to have considered the same instead of taking coercive action against the petitioner.

7. In support of his submission, he has placed reliance upon the judgment of this Court passed in the cases of Agrim Wholesale Private Limited Vs. State of U.P. and 2 others (Writ Tax No.2375 of 2024), decided on 01.09.2025, and Vishnu Singh Vs. State of U.P., (2025) 28 Centax 384 (All.).

8. She further submits that under the GST regime, several details are available on the GST Portal and once the tax invoice was generated and e- way bill was there, the authorities could have verified the same instead of seizing the goods in question.

9. In support of her submission, she has placed reliance upon paragraph nos. 10 & 11 of the judgment of this Court passed in the case of M/s Sun Flag Iron and Steel Company Limited Vs. State of U.P. and 3 others (Writ Tax 3 WTAX No. 1035 of 2019 No.837 of 2023), decided on 09.11.2023.

10. She has further placed reliance upon the judgment of the Hon'ble Apex Court passed in the case of Assistant Commissioner (ST) Vs. Satyam Shivam Papers Pvt. Ltd., 2022 (57) G.S.T.L. 97 (S.C.).

11. Per contra, learned Additional Chief Standing Counsel supports the impugned order by submitting that as the goods were detained, the petitioner would have succeeded in its attempt to evade payment of tax as the e-way bill was cancelled within 24 hours and the goods were accompanied with the cancelled e-way bill. On the detention of the goods, a new e-way bill was generated and submitted which shows the intention of the petitioner to evade tax and therefore, the proceedings were rightly been initiated against the petitioner.

12. After hearing the parties, the Court has perused the record.

13. The record shows that the scrap materials were being transported and was going to Gujarat via Ghaziabad, Uttar Pradesh. The goods were sent up to Ghaziabad along with tax invoice, e-way bill and since the wrong value of the goods were mentioned in the e-way bill generated on 06.04.2018 at 6:21 P.M., as soon it came to notice to the petitioner about the discrepancy in the e-way bill handed over to the transporter, the petitioner generated a new e- way bill on 07.04.2018 at 9:34 A.M., and submitted the same with the transporter. Once the new e-way bill was generated, no adverse inference could legally be drawn against the petitioner.

14. This Court in the case of M/s Sun Flag Iron and Steels Company Limited (supra) has categorically held that under the GST regime, all details were available on the GST Portal, and the same can be verified by the department hence the seizure of the goods cannot be justified in absence of any intention to evade payment of tax. The relevant paragraph nos. 10 & 11 of the said judgment is quoted as below: "10. In the said affidavit, it was clearly mentioned that as to why the vehicle could not be crossed the State of UP within time. It is also mentioned in the affidavit that the truck driver has not informed the petitioner about expiry of e-way bill but while passing the impugned order, the authorities have disbelieved the contention on the ground that the supporting documents with regard to the contention of the petitioner 4 WTAX No. 1035 of 2019 have not brought on record therefore impugned order has been passed imposing penalty upon the petitioner. The record reveals that while passing impugned order, authorities below have not rejected the ground taken by the petitioner that there was a breakdown as the vehicle got struck in mud.

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."

15. Similarly, this Court in the case of Shyam Sel and Power Ltd. Vs. State of U.P. (Writ Tax No.603 of 2023), decided on October 5, 2023, has recorded in detail that in absence of intention to evade payment of tax, the penalty under Section 129 (3) of the GST Act, 2017 cannot be levied.

16. The Hon'ble Apex Court in the case of Satyam Shivam Papers Pvt. Ltd. (supra) has taken the similar view.

17. In view of the above facts as stated as well as law laid down in the aforesaid judgments, the impugned order cannot be sustained in the eyes of law and the same is hereby quashed.

18. Accordingly, the writ petition is allowed.

19. Any amount deposited by the petitioner pursuant to the impugned order, shall be refunded to him within a month from the date of production of certified copy of this order. September 9, 2025 Pravesh Mishra (Piyush Agrawal,J.) PRAVESH KUMAR MISHRA High Court of Judicature at Allahabad

1. Heard Ms. Vedika Nath, learned counsel for the petitioner and Sri R.S. Pandey, learned Additional Chief Standing Counsel for the State- respondents.

2. By means of instant writ petition, the petitioner has assailed the order dated 23.05.2019 passed by respondent no.2.

3. Learned counsel for the petitioner submits that the petitioner is a company which is duly registered under the GST Act, 2017 having GSTIN No.05AAACS6857L3ZW. In the normal course of business, the petitioner supplied 8285 Kg of scrap materials to one M/s Rajputana Stainless Ltd., Panchmahal, Gujarat. After preparing the tax invoice and generating the e- way bill, the goods in question was handed over to the transporter M/s Jai Ambe Freight Carrier for transportation of goods from Uttarakhand to Ghaziabad, but thereafter, the petitioner realized that by mistake, the value of goods the e-way bill mentioned as 146644.50/- instead of Rs.5,37,696.50/-, following which to rectify the error, the petitioner cancelled e-way bill and instructed the transporter to commence the transportation of goods on the next day, after generation of a fresh e-way bill. On the next day i.e. 07.04.2018, the petitioner generated a fresh e-way bill and delivered the same to the transporter, however, the petitioner was informed by the transporter that the driver had already left for delivery of goods to its destination. When the goods in question loaded on Vehicle No.HR-63-B-2126 was crossing Shamli, the same was intercepted by respondent no.3 on 07.04.2018 at 5:10 P.M. for verification of goods as well as documents accompanying the goods in question and the physical 2 WTAX No. 1035 of 2019 verification of the same was conducted wherein the quantity of the goods in question were found to be same as mentioned in the invoice, accompanying the goods in question, however, on the sole ground that the goods in question were being transported accompanying with cancelled e-way bill, respondent no.3 passed the detention order on 07.04.2018 and on the same day, a show cause notice was issued to which a detailed reply was submitted, but being dissatisfied with the same, respondent no.3 passed the order under Section 129 (3) of the UPGST Act, 2017 on 09.04.2018. Being aggrieved from the said order, an appeal was filed by the petitioner, but the same was rejected vide order dated 23.05.2009 without considering the materials available on record.

4. She further submits there was no intention to evade the payment of tax as a fresh e-way bill was generated before detention of the goods.

5. She further submits that it is not the case that the e-way bill was not there accompanying the goods, or rather the earlier e-way bill was cancelled on the premise that there was a difference on the value mentioned in the earlier e-way bill.

6. She next submits that it is not the case of the department that the goods mentioned in the tax invoice were different, rather there was some variations in the quantity of the same. Once there is no intention to evade payment of tax and the e-way bill was generated before expiry of the earlier e-way bill and the same was produced before the authorities, it ought to have considered the same instead of taking coercive action against the petitioner.

7. In support of his submission, he has placed reliance upon the judgment of this Court passed in the cases of Agrim Wholesale Private Limited Vs. State of U.P. and 2 others (Writ Tax No.2375 of 2024), decided on 01.09.2025, and Vishnu Singh Vs. State of U.P., (2025) 28 Centax 384 (All.).

8. She further submits that under the GST regime, several details are available on the GST Portal and once the tax invoice was generated and e- way bill was there, the authorities could have verified the same instead of seizing the goods in question.

9. In support of her submission, she has placed reliance upon paragraph nos. 10 & 11 of the judgment of this Court passed in the case of M/s Sun Flag Iron and Steel Company Limited Vs. State of U.P. and 3 others (Writ Tax 3 WTAX No. 1035 of 2019 No.837 of 2023), decided on 09.11.2023.

10. She has further placed reliance upon the judgment of the Hon'ble Apex Court passed in the case of Assistant Commissioner (ST) Vs. Satyam Shivam Papers Pvt. Ltd., 2022 (57) G.S.T.L. 97 (S.C.).

11. Per contra, learned Additional Chief Standing Counsel supports the impugned order by submitting that as the goods were detained, the petitioner would have succeeded in its attempt to evade payment of tax as the e-way bill was cancelled within 24 hours and the goods were accompanied with the cancelled e-way bill. On the detention of the goods, a new e-way bill was generated and submitted which shows the intention of the petitioner to evade tax and therefore, the proceedings were rightly been initiated against the petitioner.

12. After hearing the parties, the Court has perused the record.

13. The record shows that the scrap materials were being transported and was going to Gujarat via Ghaziabad, Uttar Pradesh. The goods were sent up to Ghaziabad along with tax invoice, e-way bill and since the wrong value of the goods were mentioned in the e-way bill generated on 06.04.2018 at 6:21 P.M., as soon it came to notice to the petitioner about the discrepancy in the e-way bill handed over to the transporter, the petitioner generated a new e- way bill on 07.04.2018 at 9:34 A.M., and submitted the same with the transporter. Once the new e-way bill was generated, no adverse inference could legally be drawn against the petitioner.

14. This Court in the case of M/s Sun Flag Iron and Steels Company Limited (supra) has categorically held that under the GST regime, all details were available on the GST Portal, and the same can be verified by the department hence the seizure of the goods cannot be justified in absence of any intention to evade payment of tax. The relevant paragraph nos. 10 & 11 of the said judgment is quoted as below: "10. In the said affidavit, it was clearly mentioned that as to why the vehicle could not be crossed the State of UP within time. It is also mentioned in the affidavit that the truck driver has not informed the petitioner about expiry of e-way bill but while passing the impugned order, the authorities have disbelieved the contention on the ground that the supporting documents with regard to the contention of the petitioner 4 WTAX No. 1035 of 2019 have not brought on record therefore impugned order has been passed imposing penalty upon the petitioner. The record reveals that while passing impugned order, authorities below have not rejected the ground taken by the petitioner that there was a breakdown as the vehicle got struck in mud.

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."

15. Similarly, this Court in the case of Shyam Sel and Power Ltd. Vs. State of U.P. (Writ Tax No.603 of 2023), decided on October 5, 2023, has recorded in detail that in absence of intention to evade payment of tax, the penalty under Section 129 (3) of the GST Act, 2017 cannot be levied.

16. The Hon'ble Apex Court in the case of Satyam Shivam Papers Pvt. Ltd. (supra) has taken the similar view.

17. In view of the above facts as stated as well as law laid down in the aforesaid judgments, the impugned order cannot be sustained in the eyes of law and the same is hereby quashed.

18. Accordingly, the writ petition is allowed.

19. Any amount deposited by the petitioner pursuant to the impugned order, shall be refunded to him within a month from the date of production of certified copy of this order. September 9, 2025 Pravesh Mishra (Piyush Agrawal,J.) PRAVESH KUMAR MISHRA High Court of Judicature at Allahabad