2024 (5) TMI 1036 - HC - GST

Levy of penalty u/s 129 of GST Act - wrong mention of number of Vehicle, through which the goods were in transit, in the E-ay bill - HELD THAT - It is not in dispute that goods were being transported by the dealer through stock transfer from its unit at Agra to M/s Rawat sales in Mathura. 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 80 CT 7024. As there is no dispute to the fact that it is a case of sale of goods 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. The orders are unsustainable in the eyes of law and both the orders are hereby set aside - Petition allowed.

Summary

Issues:
Assailing penalty order under GST Act - Wrong mention of vehicle number in e-way bill - Interpretation of circular regarding errors in e-way bill.

Analysis:
The judgment by the High Court of Allahabad dealt with a writ petition challenging a penalty order under the Goods and Service Tax Act, 2017, based on the wrong mention of a vehicle number in the e-way bill. The petitioner, a registered dealer in electronic goods, was transporting goods from Agra to Mathura when the vehicle was intercepted due to a discrepancy in the e-way bill. The penalty order imposed a substantial amount, leading to an appeal that was dismissed by the appellate authority. The petitioner argued that the mistake in the e-way bill was unintentional and cited relevant case laws to support their claim of no tax evasion intent.

The Standing Counsel contended that the circular issued by the Commissioner in 2018 allowed for minor errors in transporter details but emphasized that a complete mismatch in vehicle registration numbers cannot be overlooked. The court examined the facts and the circulars to determine whether the incorrect entry of the vehicle number constituted a human error covered under the circulars. It was established that the goods were being legitimately transported, and the only discrepancy was in the vehicle registration number mentioned in the e-way bill.

Given that there was no intention to evade tax and the error was minor, the court concluded that the penalty imposed was unwarranted. The judgment highlighted that the authorities failed to establish any deliberate tax evasion by the dealer apart from the incorrect vehicle registration number in the e-way bill. Consequently, the court set aside the penalty order and the appellate authority's decision, granting relief to the petitioner. The writ petition was allowed, and the orders dated August 9, 2023, and October 31, 2023, were deemed unsustainable and quashed.