2024 (4) TMI 1144 - HC - Indian Laws

Levy of penalty - dates wrongly mentioned at the time of generating e-way bills - HELD THAT - This Court in M/s Hindustan Herbal Cosmetics v. State of U.P. and Others 2024 (1) TMI 282 - ALLAHABAD HIGH COURT held that mens rea to evade tax is essential for imposition of penalty. The factual aspect in the present case clearly does not indicate any mens rea whatsoever for evasion of tax. The goods were accompanied by the relevant documents. The finding of the authorities with regard to intention to evade tax is not supported by the factual matrix of the case, and accordingly, the impugned orders dated February 22, 2020 and March 19, 2020 are quashed and set aside. Petition allowed.

Summary

Issues:
Challenge to orders dated February 22, 2020 and March 19, 2019 regarding tax evasion and penalty imposition.

Analysis:
The petitioner challenged orders passed by the Additional Commissioner and Assistant Commissioner regarding a mistake in E-way bills for a consignment sent to M/s Bajaj Auto Ltd. The petitioner argued that the error in dates on the E-way bills was a bona fide mistake and not an attempt to evade tax. The State contended that the proceedings were justified as per statutory provisions. The court referred to a previous judgment emphasizing the necessity of mens rea for tax evasion penalties. It was noted that the error in the E-way bill was minor and did not indicate an intention to evade tax. Consequently, the court held that the authorities' finding on tax evasion intention was not supported by the facts, leading to the quashing of the impugned orders.

The court ordered the respondents to refund the tax and penalty amount deposited by the petitioner within four weeks. The writ petition was allowed in favor of the petitioner, setting aside the orders in question.