Tax Authorities Overreach: Technical E-Way Bill Error Not Proof of Deliberate Tax Evasion, Petition Allowed with Full Reliefs

HC allowed the writ petition challenging tax authorities' order. The court found a mere technical error in the E-Way Bill address did not constitute tax evasion. Authorities failed to establish intent to evade tax. The court quashed the impugned orders, directed refund of deposited amount, and granted consequential reliefs to the petitioner.

---

---

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.

---