In a significant ruling, the Calcutta High Court has held that non-production of a physical copy of the GST challan during the movement of goods cannot be a ground for imposing penalty under the GST law, especially when the digital copy is available and accessible. The judgment emphasizes the importance of digital evidence in tax proceedings and protects genuine taxpayers from unnecessary penal action.
Case Title:
Hari Rama Constructions Vs State of West Bengal & Ors.
Court:
Calcutta High Court
Judgment Date:
July 11, 2024
Citation:
WPA 2762 of 2023
Facts of the Case:
- Hari Rama Constructions, a registered GST taxpayer, was transporting goods with valid documents, including the e-way bill and tax invoices.
- However, the authorities intercepted the goods vehicle and demanded a physical copy of the GST payment challan.
- Though the driver showed the digital copy of the challan on a mobile device, the officials detained the vehicle and initiated proceedings under Section 129 of the CGST/WBGST Act, citing non-production of a “physical” document.
Legal Issue:
Whether penalty under Section 129 of the GST Act can be imposed for not carrying a physical challan despite the availability of a valid digital challan?
High Court’s Observations:
- The Court noted that Section 129 of the GST Act authorizes detention and penalty for transporting goods without proper documents.
- However, in this case, the digital challan was valid, viewable, and not disputed by the department.
- The Court emphasized that insistence on physical documentation in the digital era, especially when the same is available electronically, defeats the purpose of “faceless and paperless” administration.
Key Findings:
- Digital documentation is legally valid and sufficient under GST laws.
- The penalty imposed was arbitrary and without jurisdiction.
- The authorities acted in an over-technical and mechanical manner, which is not permissible in law.
- The detention and penalty order was quashed.
Final Order:
- The High Court quashed the penalty and detention orders.
- Directed the authorities to release the goods and the vehicle immediately.
- Held that penalty cannot be imposed merely for non-production of a physical challan when the digital version was verifiably available.
Conclusion:
This judgment reinforces the validity of digital records in GST compliance and prevents harassment of honest taxpayers over minor technical lapses. It sends a clear message that substance will prevail over form, and procedural rigidity should not override the legitimate rights of taxpayers.