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2021 (2) TMI 381 - HC - GST


Issues:
Challenge to imposition of tax and penalty based on incorrect E-way bill information.

Analysis:
The petitioner, a registered taxpayer under GST, imported machine parts from the USA, with a mistake in the E-way bill recipient's name. The State Tax Officer detained the goods and imposed tax and penalty. The appeal to the Joint Commissioner was rejected, upholding the tax and penalty.

The petitioner argued that the mistake in the E-way bill was inadvertent and not fraudulent. Despite carrying all required documents during transportation, proceedings under Section 129 of the GST Act were initiated, leading to the tax and penalty imposition.

Reference was made to Section 126 of the GST Act, emphasizing that penalties should not be imposed for minor breaches or easily rectifiable mistakes. The petitioner contended that the mistake in the E-way bill was a procedural error without fraudulent intent, as acknowledged in the impugned order.

The petitioner highlighted a circular issued by the Ministry of Finance, which addressed minor discrepancies in E-way bills and emphasized that penalties should not be imposed for such errors. The petitioner argued that the rejection of the appeal based on non-matching consignee names was unjust, as all other details in the E-way bill aligned with related documents.

The High Court, after considering the arguments and relevant provisions of the GST Act, found the rejection of the appeal unjustified. The court quashed the orders confirming tax and penalty, directing the authorities to consider imposing a minor penalty for the clerical mistake, in line with the circular issued by the Ministry of Finance.

In conclusion, the writ petition was allowed, and no costs were imposed. The court emphasized the need to differentiate between minor errors and deliberate violations, directing authorities to treat the petitioner's case as a clerical mistake and not a serious offense.

 

 

 

 

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