Penalty cannot be imposed in the absence of E-way bill until the department proves intention to evade tax

The Hon’ble Allahabad High Court in the case of M/s. Falguni Steels v. State of Uttar Pradesh and Ors. [Writ Tax No. 146 of 2023 dated January 25, 2024] held that mere technical errors, without having any potential financial implications, should not be the grounds for imposition of penalties. The Court emphasized that there must be an intention to evade tax. Therefore, if a penalty is imposed in the presence of all the valid documents, even if an E-Way Bill has not been generated, and there is the absence of any determination to evade tax, the penalty cannot be sustained.

Source a2ztaxcorp