E-way Bill Address Error Doesn't Justify Major Tax Liability and Penalty Under CGST Act for Unintentional Mistakes

The HC quashed orders imposing tax liability and penalty on a steel company under CGST Act for an E-way bill address error. The court found the mistake was unintentional and not tax evasive, as the vehicle transporting the goods remained unchanged. Following precedent from similar cases and applying the principle of parity, the court determined the error was clerical in nature. The respondents were directed to consider imposing only a minor penalty in accordance with a Ministry of Finance circular, rather than the substantial tax and penalty originally levied.

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Issues:
Challenge to orders dated 21.08.2018 and 30.10.2019 under Central Goods and Service Tax Act, 2017 regarding tax liability and penalty imposition due to an error in generating E-way bill.

Detailed Analysis:
The petitioner, a private company dealing in steel and HT wires, entered into an agreement for goods supply with another company. The goods were to be delivered at a specific factory. A consignment was transported by a particular vehicle through a transport company. A tax invoice and E-way bill were generated for the consignment, but the address on the E-way bill did not match the delivery location, leading to proceedings under Section 129 of the CGST Act. This resulted in the imposition of additional tax and penalty on the petitioner, which was upheld in the appeal process.

The petitioner argued that the error in the E-way bill was unintentional and not meant to evade tax liability, especially since the transporting vehicle remained the same. The court considered the issue, noting that a similar matter had been decided previously by both a Coordinate Bench and the present Bench in other cases. Given the bona fide nature of the mistake and invoking the principle of parity, the court decided to quash the orders dated 21.08.2018 and 30.10.2019 passed by the tax authorities.

The court directed that the respondents could consider imposing a minor penalty on the petitioner, treating the error as a clerical mistake as per a Circular issued by the Ministry of Finance, Government of India. As a result, the writ petition was allowed to the extent mentioned, with no order regarding costs.

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