Allahabad HC Supports Assessee: Penalty for E-Way Bills with Cancelled GSTIN Declared Invalid

• The case involves a Writ Tax petition in the absence of a functional GST Tribunal in Uttar Pradesh.

• The petitioner challenges an order from 2019 related to GST Appeal No. 142/2018 for the assessment year 2018-19.

• The petitioner is a registered firm engaged in the wholesale supply of various products.

• The petitioner initially received a GSTIN, but after login issues, another GSTIN was issued. They purchased goods with this new GSTIN.

• Goods purchased by the petitioner were intercepted during transit, and the tax authority detained the goods due to the cancellation of the GSTIN.

• The petitioner claims they were not informed of the GSTIN cancellation, and they had legitimate tax invoices and e-way bills.

• The petitioner argues that they couldn't generate an e-way bill if the GSTIN was canceled and that they couldn't claim input tax credit due to their chosen composition scheme.

• The tax authority contends that the GSTIN cancellation justified the detention of goods and the imposed tax and penalty.

• The court reviews the case.

• The petitioner had chosen a composition scheme, which disallowed input tax credit.

• The petitioner received two GSTINs due to a technical issue.

• The court finds that the GSTIN cancellation should have prevented access to the portal, but the petitioner accessed it.

• The petitioner's composition status is confirmed, and no input tax credit was possible.

• The court rejects the argument that the petitioner was not informed of the cancellation as it was not raised in the writ petition.

• The court emphasizes that with composition and the inability to claim input tax credit, there was no tax evasion, and the seizure based on the GSTIN cancellation is unjust.

• The court quashes the impugned order from 2019.

• The writ petition is successful, and the petitioner is granted consequential benefits. Meera Tent Cloth Supplies vs. Additional Commissioner