Calcutta HC quashes penalty order on e-way bill that expired in 9 hours

Authorities could not prove that petitioner intended to evade tax, says court

The Calcutta High Court has set aside an order by Goods and Services Tax (GST) authorities that penalised an assessee for transporting a vehicle after expiry of the e-way bill just nine hours back. Tax officials could not prove that the person concerned intended to evade tax, said the court.

The assessee contended that the e-way bill expired on December 27, 2022 and the vehicle was intercepted on December 28 and the time between the expiry of the bill and interception of the vehicle was less than a day.

There was no intention of any evasion of tax, said the assessee.

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The High Court said the tax authorities could not make out any case against the person that there was any deliberate or wilful intention of the petitioner to avoid and evade tax. As such, it set aside the order, which had been upheld by the commissioner (appeals), and directed the authorities to give a refund of the penalty to the person.

Sandeep Sehgal, partner at tax and consulting firm AKM Global, said the court ruling emphasises the importance of proving intent in tax-related cases and underscores that mere technical or accidental violations should not warrant penal provisions.

"The specific details of this case would have been considered in making this decision, and it serves as an example that the revenue should take a pragmatic view in such matters," he said.