The Aryavarth Express
Agency(Calcutta): In a recent judgment, the Calcutta High Court, led by Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya, has made a significant ruling regarding the enforcement of GST penalties. The court stated that the GST department cannot legally impose a penalty amount that exceeds the invoice value without providing proper evidence and justification for such an assessment.
The case involved a transporter who was penalized for not renewing an e-way bill, despite the initial bill including a valid tax invoice number and evidence of tax payment. The e-way bill expired on September 5, 2022, and the vehicle was detained on September 10, 2022, after experiencing mechanical breakdowns. The State Tax Officer ordered a physical verification, citing the expiration of the e-way bill as a violation of the GST statutes.
The Deputy Commissioner, invoking Section 129(1), issued an order of detention and a subsequent show cause notice proposing a 200% penalty based on the expired e-way bill. The appellant challenged this penalty, arguing that there was no intent to evade tax, and the inability to extend the e-way bill was due to circumstances beyond their control.
The appellate authority, however, dismissed the appeal for lack of documentary evidence supporting the appellant’s efforts to renew the e-way bill validity. The department argued that extending the e-way bill is a straightforward process that the appellant failed to perform.
In its decision, the court observed that while the failure to renew the e-way bill was a breach, imposing a 200% penalty without adequate supporting evidence was excessively harsh and unjustified. The court decided that such a high penalty could severely prejudice the appellant, considering the peculiarities of the case.
Ultimately, the court ruled that the appellant should pay a reduced penalty of Rs. 1,00,000. This amount is to be deducted from the total already paid by the appellant, with the balance to be refunded within three months.
