Metloy Cast Vs Additional Commissioner (Allahabad High Court)

The Allahabad High Court addressed a writ petition filed by Metloy Cast against orders passed by the Assistant Commissioner, Mobile Squad-10, Agra, and the Additional Commissioner, Grade-2, State Tax, Agra. The petitioner, a partnership firm engaged in manufacturing and supplying pipe fittings, pump spares, and related items, challenged the penalty imposed under section 129(3) of the GST Act due to alleged non-filing of Part-B of an e-way bill.According to the petitioner, on 28.11.2023, goods were dispatched from Ahmedabad to West Bengal with the requisite tax invoice and e-way bill. While attempting to fill Part-B of the e-way bill on the portal, a technical glitch caused the portal to hang, preventing completion of Part-B. The goods were intercepted at Korai, Agra, on 01.12.2023, and the Assistant Commissioner issued a detention order on 04.12.2023. Subsequently, a penalty order under section 129(3) was passed on 06.12.2023. The petitioner’s appeal against this penalty was rejected by the Additional Commissioner on 09.05.2024, prompting the writ petition.The petitioner argued that all other required documentation was provided at the time of interception and that the goods matched the tax invoice. There was no evidence of any intention to evade tax. The petitioner relied on precedents from the Allahabad High Court, including M/s Tata Hitachi Construction Machinery Company Private Limited Vs. State of U.P., M/s Citykart Retail Private Limited Vs. CCT, and M/s Roli Enterprises Vs. State of U.P., which held that non-filing of an e-way bill due to technical issues does not attract a penalty under section 129(3) if there is no intent to evade tax.The State’s counsel contended that since Part-B of the e-way bill was incomplete, the proceedings against the petitioner were justified. However, the Court observed that there was no finding by the lower authorities regarding any intention to evade tax and that the technical error preventing the filing of Part-B was undisputed.The key issue was whether the penalty under section 129(3) of the GST Act could be sustained solely for non-filing of Part-B of the e-way bill when the petitioner had provided all other necessary documents and did not intend to evade tax. Applying the precedents cited, the Court concluded that a mere technical failure to complete Part-B of the e-way bill without intent to evade tax does not justify imposing a penalty under section 129(3).