Incorrect e-way bill in head office-to-branch transport led to detention; s.129(3) penalty quashed for no tax evasion intent.

Penalty under s.129(3) CGST Act was challenged on the ground that the e-way bill wrongly declared the consignee as an additional place of business, allegedly indicating intent to evade tax. The HC held that detention was initially justified due to incorrect e-way bill particulars, but the consignor and consignee were the same taxable person (head office to branch), and the omission to update GST registration for a new place of business was a technical breach later cured by amendment of registration. As absence of mens rea to evade tax was evident, the penalty order was quashed and release of the vehicle and consignment was directed.

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Issues:
Challenge to impugned order under Section 129(3) of the CGST Act, 2017 for penalty imposition.

Analysis:
The petitioner challenged the impugned order dated 25.03.2022 seeking to impose a penalty under CGST and SGST each, totaling a significant amount under Section 129(3) of the CGST Act, 2017. The petitioner had consigned goods from its main place of business to an additional place of business, which was not originally registered. Despite declaring the consignee differently in the E-way bill and delivery Challan, the consignment was meant for the new place of business. The consignment was detained, leading to a show cause notice and subsequent reply from the petitioner.

Analysis:
The petitioner argued that there was no intention to evade tax, as they had generated an E-way bill declaring the consignee as the additional place of business. They had also taken steps to amend the registration to include the new place of business. The imposition of penalties under Section 129(3) of the CGST and SGST was deemed unwarranted by the petitioner. On the other hand, the respondent argued that the petitioner had an alternate remedy under Section 107 of the CGST Act, 2017/SGST Act, 2017, making the writ petition meritless.

Analysis:
Upon considering the arguments, the court acknowledged that the authorities were justified in detaining the goods due to the incorrect declaration in the E-way bill. However, it was noted that the consignor and consignee were the same entity, with the petitioner having a new place of business that was not initially reflected in the GST Registration. Steps were taken ex post facto to include the new place of business in the registration, and the certificate was amended accordingly.

Analysis:
Given that the breach was technical in nature and there was no intention to evade tax, the court decided to quash the impugned order and allowed the writ petition. The respondent was directed to release the vehicle and consignment to the petitioner, if not already done. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed as a result.

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