2024 (5) TMI 763 - HC - GST

Penalty order - discrepancy in Part-B of the e-way bill - only mistake on the part of the person in-charge who had downloaded the e-way bill was wrong entry of the Vehicle number - HELD THAT - It is not in dispute that goods were being transported by the dealer through stock transfer from its unit at Ludhiana to its sale depot at Asansol, West Bengal. From perusal of the e-way bill which has been brought on record, it is clear that the vehicle number has been mentioned as PB 11 AN 9287. 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 e-way bill. 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 dated March 19, 2019 and March 16, 2020 are unsustainable in the eyes of law - petition allowed.

Issues involved: Assailing penalty order under Section 129(3) of the Goods and Service Tax Act, 2017 for wrong mention of vehicle number in e-way bill during stock transfer.

Details of the judgment:

1. The petitioner, a registered dealer under the GST Act of 2017, engaged in the business of manufacturing and sale of tyres, filed a writ petition challenging the penalty order passed by the authorities for a discrepancy in the e-way bill during a stock transfer.

2. The goods were being shifted from Ludhiana to Asansol, West Bengal, accompanied by necessary documents, but the e-way bill mentioned a different vehicle number than the actual one, leading to the interception and detention of the goods by the mobile squad.

3. The penalty order imposed a tax and penalty totaling Rs. 2,99,390, which was challenged through an appeal under Section 107 of the Act, subsequently dismissed by the appellate authority, leading to the writ petition.

4. The petitioner's counsel argued that the discrepancy in the e-way bill was a human error, citing relevant judgments, and emphasized that there was no intention to evade tax, urging the court to consider the clerical mistake in the context of applicable circulars.

5. The Standing Counsel contended that the circular allowed for minor errors but not for complete discrepancies in vehicle details, highlighting the mismatch between the e-way bill entry and the actual vehicle registration number.

6. After hearing both parties and examining the evidence, the court focused on whether the wrong mention of the vehicle number in the e-way bill constituted a human error covered under the relevant circulars.

7. The court noted that despite the clerical error, the goods were legitimately being transferred from Ludhiana to Asansol, and there was no intent to evade tax, leading to the conclusion that the penalty proceedings under Section 129 were not warranted.

8. Given the minor nature of the discrepancy and the absence of evidence indicating tax evasion intentions, the court set aside the penalty order and the appellate authority's decision, ruling in favor of the petitioner.

9. Consequently, the writ petition was allowed, and the orders imposing penalties were deemed unsustainable and set aside in light of the factual and legal considerations presented during the proceedings.

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