2025 (2) TMI 791 - HC - GST

Levy of tax and penalty - technical error in the e-way bill regarding the shipping address - auto-populated e-way bill - HELD THAT - The Court is of the opinion that e-way bill is the document which is generated and accompanying the goods in transit so that department may come to know about the movement of goods from one place to another place. So that at the time of passing final assessment the particular transaction may not escape from levy of tax as per the prevalent provisions under the GST Act - Further the e-way bill can be cancelled within its validity as provided under the Act. The case in hand the e-way bill was automatically generated on 14.12.2022 which was valid up to 16.12.2022. In the present case the e-way bill has not been cancelled within its validity therefore no adverse view can be taken against the petitioner that if the goods were not intercepted transaction in question could have escape to assessment. This Court in the case of M/s Sun Flag Iron and Steel Company Limited Vs. State of UP and others 2023 (11) TMI 456 - ALLAHABAD HIGH COURT has held that the purpose of e-way bill is that the department should know the actual movement of the goods and once the e-way bill is not cancelled within the prescribed period the genuineness of the transaction cannot be questioned. Conclusion - Merely on technical ground that in the e-way bill accompanying with the goods in question the place of shipment has wrongly been mentioned the seizure or levy of penalty cannot be made. The proceedings initiated against the petitioner is not justified in the eyes of law. Petition allowed.

Summary

The issues presented and considered in the judgment are as follows:1. Whether the petitioner's goods were intercepted and penalized due to a technical error in the e-way bill regarding the shipping address, despite no discrepancies in the goods' quality or quantity?2. Whether the automatic population of e-way bill details from the e-tax invoice by the GST portal should absolve the petitioner of liability in such a case?Issue-Wise Detailed Analysis:Issue 1:- Relevant legal framework and precedents: The court considered the purpose of the e-way bill under the GST Act, which is to ensure proper tax assessment by tracking the movement of goods.- Court's interpretation and reasoning: The court noted that while a technical error in the e-way bill was present, there were no other discrepancies in the goods' quality or quantity as per the tax invoice.- Key evidence and findings: The e-way bill was auto-populated based on the e-tax invoice, and this fact was not disputed by the respondents.- Application of law to facts: The court held that a technical error in the shipping address, without affecting the goods' quality or quantity, should not lead to penalties.- Treatment of competing arguments: The petitioner argued that the proceedings were unjustified, while the respondent supported the impugned orders.- Conclusions: The court ruled that the proceedings against the petitioner were not justified, and the orders penalizing the petitioner were quashed.Issue 2:- Relevant legal framework and precedents: The court referred to the case of M/s Sun Flag Iron and Steel Company Limited Vs. State of UP, which highlighted the importance of not disputing the genuineness of a transaction based on technical grounds related to the e-way bill.- Court's interpretation and reasoning: The court emphasized that the e-way bill's purpose is to ensure the department is aware of goods' movements and that failure to cancel the e-way bill within its validity period should not lead to questioning the transaction's genuineness.- Key evidence and findings: The e-way bill in question was not canceled within its validity period.- Application of law to facts: The court held that the movement of goods and the genuineness of the transaction should not be disputed based solely on technical errors in the e-way bill.- Conclusions: The court concluded that the seizure and penalty based on a technical error in the e-way bill were not justified.Significant Holdings:- The court established that technical errors in the e-way bill, without impacting the goods' quality or quantity, should not lead to penalties.- The court reiterated that the genuineness of a transaction should not be questioned solely based on technical discrepancies in the e-way bill.- Final determinations: The court allowed the writ petition, quashed the impugned orders, and directed the refund of any deposited amount by the petitioner.In conclusion, the judgment focused on the technical errors in the e-way bill and emphasized that such errors should not result in penalties if they do not affect the actual goods' quality or quantity. The court highlighted the importance of the e-way bill for tracking goods' movements but also stressed that the genuineness of transactions should not be questioned based solely on technical grounds related to the e-way bill.