2023 (2) TMI 133 - HC - GST

Detention of goods alongwith vehicle - stock transfer - mistake in entering details of the transporter in the e-way bill - human error - whether the wrong mention of number of Vehicle No. HR- 73/6755 through which the goods were in transit and detained by the taxing authorities would be considered as a human error and will be covered under the circular No. 41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018, as the number mentioned in the e-way bill was UP-13T/6755 and the mistake is of only of HR-73 in place of U.P.-13T? HELD THAT - It is not in dispute that goods were being transported by the dealer through stock transfer from its unit at Gautam Buddha Nagar to its sale depot at Agra. The bilty which is the document of the transporter mentions the vehicle number as HR-73/6755. From perusal of the e-way bill which has been brought on record, it is clear that the vehicle number has been mentioned as UP-13T/6755. It is apparently clear that mistake is as far as the registration of the vehicle in a particular State and in place of HR-73, UP-13T has been mentioned in the e-way bill, while number of the vehicle 6755 is same. As there is no dispute to the fact that it is a case of stock transfer and there is no intention on the part of dealer to evade any tax, the minor discrepancy as to the registration of vehicle in State in the e-way bill would not attract proceedings for penalty under Section 129 and the order passed by the detaining authority as well as first appellate authority cannot be sustained - Moreover, the Department has not placed before the Court any other material so as to bring on record that there was any intention on the part of the dealer to evade tax except the wrong mention of part of registration number of the vehicle in the eway bill. The vehicle through which the goods were transported and the bilty showed the one and the same number while only there is a minor discrepancy in Part-B of the e-way bill where the description of the vehicle is entered by the dealer. The orders are unsustainable in the eyes of law and both the orders are hereby set aside - petition allowed.

Summary

Issues:
1. Assailing penalty order under Goods and Service Tax Act, 2017.
2. Discrepancy in vehicle number on e-way bill during stock transfer.
3. Interpretation of circulars regarding e-way bill errors.
4. Applicability of penalty under Section 129 of the Act.
5. Intent to evade tax in case of clerical error.

Analysis:
1. The petitioner, a registered dealer under the Goods and Service Tax Act, challenged a penalty order and an appellate order passed against it. The penalty was imposed for a stock transfer from one unit to another, where a clerical error in the e-way bill led to a discrepancy in the vehicle number mentioned.

2. The main contention was whether the incorrect entry of the vehicle number on the e-way bill, different from the actual vehicle number in transit, constituted a valid reason for penalty imposition. The goods were being transported with necessary documents, but the e-way bill had a mistake in the vehicle registration number.

3. The petitioner argued that the error was unintentional and cited relevant judgments to support their case. The circulars issued by the Commissioner were discussed, highlighting the permissible errors in the e-way bill entry. The dealer emphasized that there was no intention to evade tax, relying on legal precedents.

4. The Standing Counsel contended that the entire digit mismatch in the e-way bill was significant, and the explanation provided by the dealer should not be accepted. The discrepancy between the vehicle number on the bilty and the e-way bill was a key point of contention during the proceedings.

5. After considering the arguments and examining the evidence, the Court concluded that the clerical error in the e-way bill, regarding the vehicle registration number, did not indicate any intent to evade tax. As it was a case of stock transfer without tax evasion motives, the penalty under Section 129 of the Act was deemed inapplicable. The Court set aside the penalty order and the appellate authority's decision, ruling in favor of the petitioner.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, relevant legal principles, and the Court's final decision, providing a comprehensive understanding of the case.