Facts of the Case

The petitioner, M/S Sunil Traders, represented by Mr. Nishant Mishra and Ms. Vedika Nath, filed Writ Tax No. 678 of 2023 before the High Court of Judicature at Allahabad against the State of U.P. and 2 others, challenging an order dated 22.12.2020 passed by respondent no. 2 and an original order dated 12.02.2018 passed by respondent no. 3, imposing a penalty for transporting goods without an e-way bill under the Uttar Pradesh Goods and Services Tax Act, 2017, read with the rules framed thereunder. The alleged infraction occurred during the period 1 February 2018 to 31 March 2018.

Issues Involved

  1. Whether the penalty imposed for transporting goods without an e-way bill during 01.02.2018 to 31.03.2018 is sustainable, given that the e-way bill requirement was not yet enforceable under the U.P. GST Act during that window.
  2. Whether the petitioner is entitled to the benefit of the Division Bench rulings in Godrej and Boyce Manufacturing Co. Ltd. v. State of U.P. and M/s Varun Beverages Limited v. State of U.P., which had already settled this point.

Petitioner's Arguments

  • The petitioner argued that the controversy was squarely covered by successive Division Bench judgments of the same Court in Godrej and Boyce Manufacturing Co. Ltd. v. State of U.P. (2018 (19) G.S.T.L. 193 (All.)) and M/s Varun Beverages Limited v. State of U.P. (Writ Tax No. 1670 of 2018), both holding that the e-way bill requirement under the U.P. GST Act was unenforceable during 01.02.2018 to 31.03.2018.
  • On that basis, the petitioner contended that neither the seizure of goods nor the consequent penalty could be legally sustained, and sought quashing of both the original penalty order dated 12.02.2018 and the further order dated 22.12.2020.

Respondent's Arguments

  • The Additional Chief Standing Counsel for the State did not dispute the petitioner's proposition and fairly conceded that the judgments in Godrej and Boyce and M/s Varun Beverages had attained finality, since neither had been carried in appeal by the Department.

Court Order/Findings

  • Applying the settled law laid down in M/s Varun Beverages Limited v. State of U.P., which itself followed Godrej and Boyce Manufacturing Co. Ltd. v. State of U.P., the Court held that the e-way bill requirement under the U.P. GST Act was unenforceable for the period covering the petitioner's transaction, and the penalty imposed on that basis could not be sustained.
  • Operative direction: the impugned orders dated 22.12.2020 and 12.02.2018 were quashed, and the writ petition was allowed.
  • The Court further directed that any amount already deposited by the petitioner be refunded within one month.

Important Clarification

  • Penalties for transporting goods without an e-way bill during the period 01.02.2018 to 31.03.2018 under the U.P. GST Act are not sustainable, since the e-way bill requirement itself was unenforceable during that window, per binding Division Bench precedent (Godrej and Boyce; M/s Varun Beverages).
  • Once the Department has conceded the finality of a covering precedent, similarly placed transporters or dealers penalised for the same period can seek identical relief without fresh litigation on the merits.

Sections Involved

  • Uttar Pradesh Goods and Services Tax Act, 2017 - the parent statute under which the e-way bill requirement and the penalty for non-compliance were purportedly imposed.
  • E-way bill Rules framed under the U.P. GST Act - the specific rules held unenforceable for the period 01.02.2018 to 31.03.2018.

Decision – In Favour of

Assessee - the writ petition was allowed, the penalty orders were quashed, and a refund of any amount already deposited was directed within one month.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Judicature at Allahabad
  • Case No.: WRIT TAX No. 678 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble Justice Ajay Bhanot
  • Decision Date: 16.11.2023
  • Disposal Nature: Writ petition allowed; penalty orders quashed

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