2024 (7) TMI 613 - HC - GST

Challenge to order passed u/s 129 (3) of Goods and Services Tax Act, 2017 - mistake of mentioning the date on E-way Bill and Tax Invoice - HELD THAT - It transpires that there is only a mistake of mentioning the date on E-way Bill and Tax Invoice, which is a bona-fide typographical error on the part of person who generated the same, as such, it's a minor error, therefore it cannot be held that there was mens rea of evading tax, which is essential for imposing penalty. The ground of mentioning wrong date in the E-way Bill cannot be drawn against the petitioner. Further, the material has been brought on record as Annexure No.10 to the present writ petition, that selling dealer is having active GSTIN and the said fact has not been disputed by the respondents in the counter affidavit. Furthermore, merely because Trimbakeswar Steels i.e. the selling dealer has shown the office in some flat, will not entitle the respondents to draw any adverse inference against the petitioner until and unless, some cogent material has been brought on record. The record reveals that the inference has only been drawn against the petitioner on surmises and conjectures, which cannot be permitted in the eye of law. Therefore, no adverse inference can be attributed to the petitioner with regard to evasion of tax. The impugned order cannot sustain and the same is set aside - Petition allowed.

Summary

Issues:
Challenge to order under GST Act for mismatched dates on tax invoice and E-way bill.

Analysis:
The petitioner challenged an order under the Goods and Services Tax Act regarding a discrepancy in dates on a tax invoice and E-way bill. The petitioner received an order for supply of M.S. Bar and directed the supplier to send the goods to the purchaser. However, the goods were intercepted during transit due to a mismatch in dates on the tax invoice and E-way bill. The authorities detained the goods, suspecting tax evasion. The petitioner argued that both parties were registered and active under GSTIN, and the discrepancy was a typographical error. The respondent contended that the transactions were bogus due to the date mismatch and doubts about the selling dealer's bona fides.

The Court examined the case and found that the date discrepancy was a minor typographical error, not indicative of tax evasion. Citing a previous judgment, the Court emphasized that mens rea to evade tax is essential for imposing penalties. The Court held that in this case, there was no intention to evade tax, as the error was minor and unintentional. The Court also noted that the selling dealer was active under GSTIN, and no concrete evidence was presented to support the suspicion of tax evasion. The Court concluded that drawing adverse inferences based on conjectures was impermissible in law.

Based on the facts, the Court set aside the impugned order, ruling in favor of the petitioner. The Court directed the refund of any amount deposited by the petitioner in compliance with the order. The judgment highlighted the importance of mens rea in tax evasion cases and emphasized the need for concrete evidence to support allegations of wrongdoing. The decision provided clarity on typographical errors and their implications in tax-related matters, ensuring fair treatment for taxpayers in similar situations.