2024 (2) TMI 760 - HC - GST

Penalty order - wrongful mention of place of supply in E-Way bills - intent to evade tax or not - reason for the mistake having been done by some of the parties is that on filling the GSTIN (registration number) of the petitioner while generating the E-Way bill, the principal place of business is automatically reflected in the place of supply(which is auto populated) - HELD THAT - Upon a perusal of the detention order, the order imposing penalty and the order passed in appeal, a common thread appears to run through the same, i.e. there was non-compliance of the Rules by putting the wrong address in four of the e-way bills. The common thread that also runs through these orders is that the invoices and the bilties in all the eight invoices and in four of the e-way bills was correct in all respect including the address. Undisputedly, the address in four of the e-way bills was incorrect. However, what is to be seen is that this particular address was not an anonymous address, but was the address of the registered office of the petitioner. The explanation provided by the petitioner with regard to a mistake on the part of the supplier to have populated the incorrect address is not far fetched, especially since the correct addresses were mentioned in all the eight invoices and the eight bilties. From the above factual matrix, it does not appear that there was any intention whatsoever to evade tax. In the present case, it is palpably clear that the goods were accompanied with the relevant invoices, bilty documents and the e-way bills. It is to be noted that the invoices and bilty documents also contain the correct address of the destination and only four out of eight of the e-way bills had the incorrect address. Even this incorrect address was the registered office of the petitioner. In such a case, no presumption to evade tax arises at all. The mere technical error committed by the petitioner cannot result in imposition of such harsh penalty upon the petitioner. The penalty imposed in this particular case is without any basis in law, and accordingly, impugned penalty order dated February 14, 2020 and the order passed in appeal dated October 13, 2020 are quashed and set aside - The writ petition is allowed.

Summary

Issues involved: Application under Article 226 seeking writ of certiorari for quashing penalty order and appeal order related to incorrect place of supply in E-Way bills.

Facts of the case:
The petitioner, engaged in manufacturing pressure cookers, faced penalty for incorrect place of supply in E-Way bills leading to seizure of goods.

Contentions of the Petitioner:
Petitioner argued that the incorrect address in E-Way bills was a technical breach due to supplier error, with correct destination address in accompanying documents.

Respondent's Arguments:
Respondent contended that the error raised tax evasion presumption, citing legal precedents.

Analysis and Conclusion:
The Court found no intention to evade tax, distinguishing cited cases where no such intention was evident. Emphasized that technical errors without intent do not warrant penalty. Quoted Chanakya's Arthashastra to highlight fair tax collection. Consequently, the penalty order and appeal order were quashed.

Judgment Outcome:
The writ petition was allowed, and the penalty orders were set aside.