2024 (1) TMI 282 - HC - GST

Typo in e-way bill Part-B vehicle number during GST goods transit-s.129 penalty quashed for no intent to evade tax.

Penalty under s.129 of the GST Act was examined where Part-B of the e-way bill contained an incorrect vehicle number due to a minor typographical error. ... Penalty under Section 129 for incorrect e-way bill particulars - typographical error in e-way bill - mens rea for tax evasion - non-imposition of penalty in absence of intention to evade tax - equitable application of law - reliance on M/s. Varun Beverages Limited and M/s. Satyam Shivam Papers Penalty under Section 129 for incorrect e-way bill particulars - typographical error in e-way bill - mens rea for tax evasion - non-imposition of penalty in absence of intention to evade tax - Whether imposition of penalty for incorrect vehicle number in the e-way bill was sustainable where the discrepancy was a typographical error and there was no material to show intention to evade tax - HELD THAT: - The Court found that the vehicle number in Part-B of the e-way bill was incorrectly entered (typed as 3552 instead of 5332). Although the error involved three digits-exceeding the two-digit concession in a departmental circular-the determinative consideration was whether there was any material to demonstrate mens rea to evade tax. Relying on the coordinate High Court decision in M/s. Varun Beverages Limited and the Supreme Court decision in M/s. Satyam Shivam Papers, the Court held that a typographical error in the e-way bill, unaccompanied by any other evidence of intent to evade tax, does not attract penalty under Section 129. The Court emphasised that law must be applied equitably and that minor clerical mistakes of the nature found in the present case cannot be equated with culpable conduct warranting confiscation or penalty. Consequently, the imposition of penalty was held to be without jurisdiction and illegal in law. [Paras 6, 7, 8, 9]Impugned orders imposing penalty and confirming detention were quashed and set aside; consequential reliefs to be afforded within four weeks and the writ petition allowed.Final Conclusion: The writ petition was allowed: the orders of detention and penalty were quashed as the incorrect vehicle number in the e-way bill was a typographical error without any material of mens rea to evade tax; consequential reliefs to be provided within four weeks. Issues involved:The issues involved in the judgment are the imposition of penalty under the Goods and Service Tax Act, 2017 based on a typographical error in the e-way bill regarding the vehicle number during the transportation of goods.Summary of Judgment:Issue 1: Typographical error in the e-way billThe petitioner, a registered dealer under the Goods and Service Tax Act, supplied cosmetics to another registered dealer in Jharkhand. The consignment was intercepted due to a typographical error in the e-way bill regarding the vehicle number. The authorities imposed a penalty solely on this ground, without any allegation of tax evasion. The petitioner argued that the error was a typographical mistake and cited relevant case law to support their position. The Additional Chief Standing Counsel contended that penalties are not imposed for minor errors beyond two digits in the vehicle number, as per a government circular.Analysis and Conclusion:The court found that the typographical error in the e-way bill was a minor discrepancy and not indicative of an intention to evade tax. Referring to relevant case law, the court emphasized the requirement of mens rea for the imposition of penalties under the Act. In cases where errors are minor and do not suggest tax evasion, penalties should not be imposed. The court quashed the impugned orders and directed the authorities to provide consequential reliefs to the petitioner within four weeks.Separate Judgment:The judgment delivered by the High Court emphasizes the importance of mens rea in cases involving penalties under the Goods and Service Tax Act, 2017. It highlights that minor typographical errors, without evidence of intent to evade tax, should not result in the imposition of penalties. The court relied on precedents to support its decision and provided relief to the petitioner by quashing the penalty orders.