2024 (3) TMI 169 - HC - GST

Dismissing the appeal filed by the petitioner - error of address of the consignee in the E-Way Bill - existence of mens rea or not - HELD THAT - Upon perusal of the record, it appears that apart from an error with regard to the address of the consignee in the E-Way Bill, there were no other issues with the said consignment. The invoice contained the address, the goods matched the description in the invoice and all other materials were intact. The imposition of tax is only on the basis of a technical error with regard to address of the consignee that was wrongly written in the E-Way Bill. The authorities have not been able to indicate any mens rea on the part of the petitioner for evasion of tax. In a catena of judgments, this Court has held that presence of mens rea for evasion of tax is a sine qua non for imposition of penalty and mere technical error would not lead to imposition of penalty reliance can be placed in the case of M/S MODERN TRADERS VERSUS STATE OF UP AND 2 OTHERS 2018 (5) TMI 1030 - ALLAHABAD HIGH COURT and M/S. HINDUSTAN HERBAL COSMETICS VERSUS STATE OF U.P. AND 2 OTHERS 2024 (1) TMI 282 - ALLAHABAD HIGH COURT . The orders dated September 23, 2023 and April 10, 2021 are quashed and set aside. The amount deposited by the petitioner be refunded to it within a period of one month from date - Petition allowed.

Summary

Issues involved:
The judgment deals with a writ petition under Article 226 of the Constitution of India challenging an order passed by the Additional Commissioner, Grade-2 (Appeal)-I, State Goods and Services Tax, NOIDA dismissing the appeal filed by the petitioner and the original order dated April 10, 2021.

Summary:

Issue 1: Error in E-Way Bill Address
Upon perusal of the record, it was found that besides an error in the consignee's address in the E-Way Bill, there were no other discrepancies with the consignment. The invoice details matched the goods description, and all other documentation was in order. The imposition of tax was solely due to a technical error in the consignee's address on the E-Way Bill. The authorities failed to establish any mens rea on the petitioner's part for tax evasion.

Issue 2: Mens Rea for Tax Evasion
The judgment cited previous decisions of the court emphasizing that the presence of mens rea for tax evasion is essential for imposing penalties. It was established that a mere technical error, without intent to evade tax, should not result in penalty imposition. The court referenced cases like M/s Modern Traders v. State of U.P. and others, M/s Galaxy Enterprises v. State of U.P. and others, and Hindustan Herbal Cosmetics v. State of U.P. and others to support this principle.

Decision:
In consideration of the above, the court quashed and set aside the orders dated September 23, 2023, and April 10, 2021. The court directed the refund of the deposited amount to the petitioner within one month and ordered other consequential reliefs to be granted. Consequently, the writ petition was allowed.