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2025 (3) TMI 613 - HC - GSTLevy of penalty u/s 129(1)(b) of the Central Goods and Services Tax Act 2017 - inadvertent typographical error - vehicle number in the e-way bill was indicated as HR-46C-4623 instead of HR-58C-4623 - HELD THAT - In M/s. Halder Enterprises v. State of U.P. others 2023 (12) TMI 514 - ALLAHABAD HIGH COURT a co-ordinate Bench of this Court based on the circular dated 31.12.2018 came to the conclusion that wherever the said circular is applicable and when the tax invoice and the E-way bill are produced by the assessee the goods shall be treated as belonging to the assessee who comes before the authorities as the owner of the goods and produces the documents and it was further held that in such cases that the security is required to be in terms of Section 129(1)(a) and not under Section 129(1)(b) of the Act and therefore the goods are required to be released under Section 129(1)(a) of the Act. In the present case the principle laid down in the case of M/s. Halder Enterprises would apply and the goods have to be released under Section 129(1)(a) of the Act. Conclusion - The goods should be released under Section 129(1)(a) and the authorities were directed to expedite this process based on the circular dated 31.12.2018. Petition allowed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS Discrepancy in Vehicle Number and Imposition of Penalty: The relevant legal framework involves Section 129 of the Central Goods and Services Tax Act, 2017, which deals with the detention, seizure, and release of goods and conveyances in transit. The discrepancy in the vehicle number was due to a typographical error, with the e-way bill reflecting HR-46C-4623 instead of HR-58C-4623. The Court's interpretation emphasized that the discrepancy was minor and did not affect the validity of the accompanying documents. The key evidence included the delivery challan and e-way bill, which were produced at the time of interception, and the petitioner's claim of ownership supported by documentary proof. The Court applied the law by referencing a prior decision in M/s. Halder Enterprises, which established that when the tax invoice and e-way bill are produced, the goods should be treated as belonging to the assessee. The Court reasoned that the penalty under Section 129(1)(b) was unjustified given the minor nature of the discrepancy and the petitioner's compliance with documentation requirements. Competing arguments were addressed by considering the respondent's stance that the discrepancy justified the penalty. However, the Court concluded that the minor error did not warrant such action, especially in light of the precedent set by M/s. Halder Enterprises. Application of M/s. Halder Enterprises Precedent: The Court referred to the precedent established in M/s. Halder Enterprises, which involved a similar situation where the production of tax invoices and e-way bills led to the conclusion that the goods should be released under Section 129(1)(a). The circular dated 31.12.2018 was pivotal in this determination, as it guided the treatment of such discrepancies. The Court found that the principle from the M/s. Halder Enterprises case applied to the present case, mandating the release of goods under Section 129(1)(a) rather than a penalty under Section 129(1)(b). SIGNIFICANT HOLDINGS The Court held that the order dated 22.01.2025 imposing a penalty of Rs. 59,00,000/- was to be quashed and set aside. The significant legal reasoning included the following:
The core principles established include the treatment of minor discrepancies in e-way bills and the application of Section 129(1)(a) when ownership is claimed and documented. The final determination was that the goods should be released under Section 129(1)(a), and the authorities were directed to expedite this process. The petitioner was advised to pursue any further remedies in accordance with the law before the appropriate forum regarding other issues not addressed in this judgment.
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