Intention to evade tax is absent, taxpayer needs to be given another chance: Delhi High Court

The Delhi High Court in the case Nirmal Kumar Mahaveer Kumar Versus Commissioner of CGST observed and has held that the taxpayer/petitioner needs to be given another chance to establish why the subjected goods did not reach their designated designation before the expiry of the e-way bill.

The division bench comprising of Justice Rajeev Shakdher and Justice Tara Vitasta Ganju observed and has remanded the matter to the respondent to take a fresh decision on the matter, after giving the petitioner due opportunity to produce relevant material and evidence to establish its case.

It was submitted by the petitioner that the e-way bill had expired when the goods were intercepted. The notice on form MOV-07 was issued, along with the penalty demand and with the proposed tax. Thus, the petitioner was given seven days to file a response and to appear before the relevant officer for a hearing on October 7, 2020.

The amount was paid by the petitioner for tax and penalty on the same date as the notice, i.e., 30.09.2020, because he wanted the goods to arrive at their destination as soon as possible. However, as a result of which the petitioner did not take advantage of the opportunity to demonstrate that the goods could not reach their destination before the e-way bill’s validity period expired.

It was explained by the petitioner that since the earlier vehicle had broken down, another vehicle was requisitioned for transporting the goods.

The Court observed that the reason given for the issuance of the show-cause notice was “goods not covered by valid documents and the proposed tax and penalty were also indicated in the show-cause notice.

Further, in consonance with the principles of natural justice, the petitioner was accorded 7 days to file a reply with respect to the proposed demand made towards tax and penalty, and to appear before the concerned officer on 07.10.2020 for a hearing.

In the present case, the court directed the concerned officer to bear in mind the provisions of section 126 of the CGST Act, which adverts to omission or mistake in documentation which is easily rectifiable. Accordingly, the court directed the respondent to issue a notice, in writing, to the petitioner, indicating the date and time when he intends to hear the petitioner and/or his authorized representative, in support of his case.

It was submitted by the petitioner that the e-way bill had expired when the goods were intercepted. The notice on form MOV-07 was issued, along with the penalty demand and with the proposed tax. Thus, the petitioner was given seven days to file a response and to appear before the relevant officer for a hearing on October 7, 2020