2024 (1) TMI 282 - HC - GST

Levy of penalty - vehicle number in Part-B of the e-way bill was incorrect - minor typographical error - no mens rea (intent to evade) - HELD THAT - The principle that emerges is that presence of mens rea for evasion of tax is a sine qua non for imposition of penalty. A typographical error in the e-way bill without any further material to substantiate the intention to evade tax should not and cannot lead to imposition of penalty. In the case of M/s. Varun Beverages Limited 2023 (2) TMI 133 - ALLAHABAD HIGH COURT there was a typographical error in the e-way bill of 4 letters (HR 73). In the present case, instead of 5332 , 3552 was incorrectly entered into the e-way bill which clearly appears to be a typographical error. In certain cases where lapses by the dealers are major, it may be deemed that there is an intention to evade tax but not so in every case. Typically when the error is a minor error of the nature found in this particular case, the imposition of penalty under Section 129 of the Act is without jurisdiction and illegal in law. The impugned order set aside - petition allowed.

Summary

Issues involved:
The issues involved in the judgment are the imposition of penalty under the Goods and Service Tax Act, 2017 based on a typographical error in the e-way bill regarding the vehicle number during the transportation of goods.

Summary of Judgment:

Issue 1: Typographical error in the e-way bill
The petitioner, a registered dealer under the Goods and Service Tax Act, supplied cosmetics to another registered dealer in Jharkhand. The consignment was intercepted due to a typographical error in the e-way bill regarding the vehicle number. The authorities imposed a penalty solely on this ground, without any allegation of tax evasion. The petitioner argued that the error was a typographical mistake and cited relevant case law to support their position. The Additional Chief Standing Counsel contended that penalties are not imposed for minor errors beyond two digits in the vehicle number, as per a government circular.

Analysis and Conclusion:
The court found that the typographical error in the e-way bill was a minor discrepancy and not indicative of an intention to evade tax. Referring to relevant case law, the court emphasized the requirement of mens rea for the imposition of penalties under the Act. In cases where errors are minor and do not suggest tax evasion, penalties should not be imposed. The court quashed the impugned orders and directed the authorities to provide consequential reliefs to the petitioner within four weeks.

Separate Judgment:
The judgment delivered by the High Court emphasizes the importance of mens rea in cases involving penalties under the Goods and Service Tax Act, 2017. It highlights that minor typographical errors, without evidence of intent to evade tax, should not result in the imposition of penalties. The court relied on precedents to support its decision and provided relief to the petitioner by quashing the penalty orders.