Facts of the Case

M/S Sunil Traders, the petitioner, was subjected to penalty proceedings under the Uttar Pradesh Goods and Services Tax Act, 2017 read with the Rules framed thereunder, on the ground that goods were transported without an accompanying e-way bill. The alleged infraction occurred during the period 01.02.2018 to 31.03.2018. An order dated 12.02.2018 was passed by respondent no. 3 imposing the penalty, and a further order dated 22.12.2020 was passed by respondent no. 2. Aggrieved by both orders, the petitioner approached the High Court of Judicature at Allahabad by way of Writ Tax No. 676 of 2023, seeking to quash the orders dated 12.02.2018 and 22.12.2020.

Issues Involved

  1. Whether the requirement to carry an e-way bill under the UP GST Act, 2017 and the Rules framed thereunder was enforceable during the period 01.02.2018 to 31.03.2018.
  2. Whether penalty could be sustained for goods transported without an e-way bill during that period, when the requirement itself was unenforceable.
  3. Whether the petitioner was entitled to the benefit of binding Division Bench precedents on an identical controversy.

Petitioner's Arguments

  • Learned counsel for the petitioner, Shri Nishant Mishra, assisted by Ms. Vedika Nath, submitted that the controversy was squarely covered by successive Division Bench judgments of the Allahabad High Court.
  • Relied on Godrej and Boyce Manufacturing Co. Ltd. vs. State of U.P., reported at 2018 (19) G.S.T.L. 193 (All.).
  • Also relied on M/s Varun Beverages Limited vs. State of U.P. and 2 Others, Writ Tax No. 1670 of 2018, which itself followed Godrej and Boyce.
  • Contended that during 01.02.2018 to 31.03.2018, the e-way bill requirement under the UP GST Act read with the Rules framed thereunder was unenforceable, so that neither seizure of goods nor imposition of penalty could be sustained.

Respondent's Arguments

  • Shri Rishi Kumar, learned Additional Chief Standing Counsel appearing for the State, did not dispute the petitioner's proposition.
  • Fairly admitted that the judgments in Godrej and Boyce Manufacturing Co. Ltd. and M/s Varun Beverages Limited had attained finality, since they had not been carried in appeal.

Court Order/Findings

  • The Court noted the Division Bench ruling in M/s Varun Beverages, which had itself followed Godrej and Boyce Manufacturing Co. Ltd. (2018 U.P.T.C. [Vol.100]-1206) in holding that during 01.02.2018 to 31.03.2018, the requirement of e-way bill under the UP GST Act read with Rules framed thereunder was unenforceable.
  • Since the controversy was squarely covered by the Division Bench decision, with which the Court was in agreement, neither seizure of goods was justified nor could the penalty be sustained.
  • The Court held that the petitioner was entitled to the benefit of the law laid down in M/s Varun Beverages Limited.
  • The impugned orders dated 22.12.2020 and 12.02.2018 were quashed.
  • Any amount deposited by the petitioner was directed to be refunded in accordance with law within a period of one month.
  • The writ petition was allowed.

Important Clarification

  • The e-way bill requirement under the UP GST Act, 2017 read with the Rules framed thereunder was held to be unenforceable specifically for the period 01.02.2018 to 31.03.2018.
  • Consequently, neither seizure of goods nor penalty for transporting goods without an e-way bill can be sustained for consignments moved during this window.
  • This principle rests on binding Division Bench precedent (Godrej and Boyce Manufacturing Co. Ltd. and Varun Beverages Limited) that has attained finality, not having been carried in appeal, and remains available to similarly placed taxpayers whose consignments fall within the same period.

Sections Involved

  • Uttar Pradesh Goods and Services Tax Act, 2017 — the state enactment under which the e-way bill requirement and the penalty for transporting goods without one were sought to be enforced against the petitioner.
  • Rules framed under the UP GST Act, 2017 — prescribe the e-way bill mechanism governing movement of goods, the enforceability of which for the period 01.02.2018 to 31.03.2018 was in issue.

Decision – In Favour of

Assessee. The writ petition was allowed, the impugned penalty orders dated 12.02.2018 and 22.12.2020 were quashed, and the Court directed refund of any amount deposited by the petitioner within one month.

Related Case Laws

  • Godrej and Boyce Manufacturing Co. Ltd. vs. State of U.P., 2018 (19) G.S.T.L. 193 (All.) — the foundational Division Bench ruling holding the e-way bill requirement unenforceable for the relevant period.
  • M/s Varun Beverages Limited vs. State of U.P. and 2 Others, Writ Tax No. 1670 of 2018 — Division Bench decision applying Godrej and Boyce to quash a similar penalty order.

Case Details

  • Court: High Court of Judicature at Allahabad
  • Case No.: Writ Tax No. 676 of 2023
  • Neutral Citation: 2023:AHC:218093
  • Coram: Hon'ble Ajay Bhanot, J.
  • Order Date: 16.11.2023
  • Petitioner: M/S Sunil Traders
  • Respondent: State of U.P. and 2 Others
  • Counsel for Petitioner: Nishant Mishra, Saleem Akhter, Yashonidhi Shukla
  • Counsel for Respondent: C.S.C. (Rishi Kumar, Additional Chief Standing Counsel)

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