Aa Plastics Pvt Ltd Vs Additional Commissioner (Allahabad High Court)

In this case, the petitioner, a manufacturer and supplier of LD polythene sheets and bags, challenged the order dated 16.03.2022 passed by the Additional Commissioner, arising from the detention of goods and levy of penalty under GST law. The petitioner’s goods were dispatched on 05.08.2021 and were in transit when they were detained on 09.08.2021 because the e-way bill had expired. The petitioner explained that the delay occurred as the truck driver diverted to his native place without informing the consignor or consignee. An amended e-way bill dated 08.08.2021 and 09.08.2021 was produced the next day, but the authorities proceeded to seize the goods and impose a penalty. The petitioner argued that there was no variation in quantity, all documents were correct, and the amended e-way bill had been produced before the seizure order. They further contended that there was no intention to evade tax, a mandatory requirement for invoking Section 129 proceedings. Reliance was placed on the judgment in Shyam Sel and Power Ltd., where the Court held that proceedings under Section 129 must be read with Section 130, and both provisions require an intent to evade tax. The Court in that case held that minor breaches such as those relating to the e-way bill should instead attract proceedings under Section 122.In the present case, the revenue did not dispute that the amended e-way bill had been produced before the seizure order was passed, nor did it establish any mens rea or intention to evade tax. The Court observed that the revenue also failed to show any such intention during the hearing. Referring to the principles laid down in Shyam Sel, particularly that intention to evade tax is a sine qua non for invoking Section 129, the Court held that the impugned order was unsustainable. Accordingly, the seizure and penalty order dated 17.08.2021 was quashed, the writ petition was allowed, and the authorities were directed to refund any amount deposited by the petitioner within one month of receiving the certified copy of the order.