2022 (8) TMI 408 - HC - GST

Levy of tax and equal amount of penalty - petitioner made an inadvertent error in applying for the e-way bill - wrong address mentioned in the E-way bill - HELD THAT - There is no doubt to the fact that the petitioner is an event management firm having its head office at Katni, Madhya Pradesh. It is also not in dispute that the petitioner was awarded some contract at Kumbh Mela, Haridwar, in the State of Uttarakhand. For that purpose, it was transporting LED panels on truck bearing registration no. HR- 55-V-5014. While in transit through State of U.P., the vehicle was stopped for inspection. It was found accompanying with the e-way bill disclosing transportation of LED panels from the petitioner's place of business at Katni to the petitioner's other place of business at Haridwar, Uttarakhand. There appears no doubt to the genuineness of the explanation furnished by the assessee that the mistake was inadvertent. Once the assessee had disclosed the place of shipment at Haridwar, Uttarkhand, there survived no occasion to fill up the place of destination at Madhya Pradesh with the pin code of the petitioner's office at Katni, Madhya Pradesh. Clearly, the mistake was bonafide as sometime occurs - In absence of any allegation or material found of ill-intent on part of the assessee to transport the goods for the purposes of sale, the imposition of tax and demand of penalty is wholly unfounded. The goods are old. The breach was technical and not real. Petition allowed.

Summary

Issues:
Challenge to appellate authority's order under Section 129(3) of the U.P. Goods and Services Tax Act, 2017 for imposing tax and penalty on petitioner for transportation of LED panels.

Analysis:
The petitioner, an event management firm based in Madhya Pradesh, was transporting LED panels to Haridwar, Uttarakhand for a contract at Kumbh Mela. An inadvertent error in the e-way bill led to the destination being filled as Madhya Pradesh instead of Uttarakhand, causing the bill to expire prematurely on 24.12.2020. Despite this technical error, no ill-intent was found on the part of the petitioner to evade tax or engage in any fraudulent activity.

The High Court found the explanation provided by the petitioner regarding the mistake in the e-way bill to be genuine and bonafide. The court noted that the mistake was unintentional and occurred due to a software error, leading to the seizure of goods and imposition of tax and penalty. The court emphasized that there was no evidence of the petitioner intending to use the transportation for sale purposes or engaging in any malpractice.

Consequently, the High Court held that the imposition of tax and penalty on the petitioner was unjustified and unfounded. The court deemed the breach to be technical in nature and not indicative of any deliberate wrongdoing on the part of the petitioner. As a result, the court set aside the orders dated 28.12.2020 and 5.3.2021, directing the return of any security and penalty deposited by the petitioner in accordance with the law.

In conclusion, the High Court allowed the petition, ruling in favor of the petitioner and overturning the orders imposing tax and penalty under Section 129(3) of the U.P. Goods and Services Tax Act, 2017.