2021 (3) TMI 540 - HC - GST

Court sets aside tax order for minor error in E-way bill penalties, citing lack of authority and procedural flaws.

Tirthamoyee Aluminium Products Versus State of Tripura, Chief Commissioner of State Tax, Inspector of State Tax Government of Tripura, Hindalco Industries Ltd., Union of India

Tirthamoyee Aluminium Products Versus State of Tripura, Chief Commissioner of State Tax, Inspector of State Tax Government of Tripura, Hindalco Industries ... Issues:Challenge to tax demand under CGST and SGST Acts based on clerical error in E-way bill validity period leading to penalty imposition.Detailed Analysis:Issue 1: Tax Demand and Penalty ImpositionThe petitioner challenged an order demanding CGST and SGST along with penalties under the CGST and SGST Acts due to a clerical error in the E-way bill. The goods were transported from Howrah to Agartala, with the E-way bill showing an incorrect distance of 470 Kms instead of the actual 1470 Kms. The Inspector of State Tax issued the demand and penalty without granting a proper hearing to the petitioner, which was contested by the petitioner.Issue 2: Legal Provisions and CircularsThe judgment highlighted the relevant provisions of the GST Act and Rules, emphasizing the importance of correct documentation for goods transportation. The Central Board of Indirect Taxes and Customs issued a circular clarifying the treatment of minor discrepancies in E-way bills, stating that penalties should not be imposed for errors like incorrect document numbers or minor lapses. This circular guided the court's decision in this case.Issue 3: Court's Analysis and DecisionAfter considering submissions from both parties and examining the documents, the court found that the clerical error in the E-way bill was a minor oversight. The court noted key undisputed facts, including the correct distance between the origin and destination, the duty paid status of the goods, and the inter-state nature of the sale. The court referred to the circular and the affidavits filed by the Central Government and the company from which the goods were purchased, supporting the petitioner's claim of a minor clerical error.Conclusion:The court ruled in favor of the petitioner, setting aside the order demanding tax and penalties. The court emphasized that the Inspector of State Tax did not have the authority to demand GST with penalties in this case, especially considering the minor nature of the error and the lack of proper hearing granted to the petitioner. The judgment concluded by disposing of the petition and any pending applications related to the case.