Calcutta 26th January 2023: In a landmark judgment that is being hailed as a significant relief for the business community, the Allahabad High Court has set aside penalties imposed on M/s Rawalwasia Yarn Dying Pvt Ltd for non-compliance with the e-Way Bill provisions under the Uttar Pradesh Goods and Services Tax Act, 2017 (UPGST, 2017). The ruling, dated 16th January 2024, addresses the contentious issue of penalties for not filling up Part 'B' of the e-Way Bill, a mandatory requirement for transporting goods under the GST regime.

The case, WRIT TAX No. 352 of 2023, emerged from an order dated 24th May 2022, which levied a penalty on the petitioner for the said non-compliance, and an appellate order dated 15th October 2022, which upheld the penalty. In delivering the judgment, Hon'ble Shekhar B. Saraf, J., emphasized that the mere non-filling of Part 'B' of the e-Way Bill, without any intent to evade tax, does not justify the imposition of penalties under Section 129(3) of the UPGST Act.

This ruling is a significant milestone in interpreting GST laws, particularly concerning the e-Way Bill. By prioritizing the intent behind non-compliance, the court has provided much-needed clarity and relief to the business community, reinforcing the principle of fairness in tax administration.

Advocate Goutam Karmakar, a Senior Consultant at GST DOST, commented on the judgment: "This ruling is a breath of fresh air for the business community, particularly for small and medium enterprises that often grapple with the complexities of GST compliance. The Allahabad High Court has rightly differentiated between inadvertent errors and deliberate tax evasion. This judgment underscores the importance of intent in compliance matters and sends a clear message that technical errors, when not coupled with an intent to evade tax, should not be penalized harshly."

This landmark judgment is expected to have far-reaching implications for businesses across Uttar Pradesh and potentially influence GST compliance and enforcement practices nationwide. It highlights the judiciary's understanding of the practical challenges businesses face in adhering to GST regulations and the need for a balanced approach in imposing penalties.

The ruling also reminds businesses to maintain diligent GST compliance practices while providing some reassurance that genuine mistakes will not lead to disproportionate penalties. As the GST regime continues to evolve, this judgment will likely be referenced in future cases involving similar issues of technical non-compliance without the intent to evade taxes.

Businesses can use this ruling as an opportunity to review their GST compliance practices, ensure they adhere to the regulations, and avoid harsh penalties for inadvertent errors.