2024 (4) TMI 1079 - HC - GST

Minor E-Way Bill Errors Without Tax Evasion Intent Cannot Trigger Penalties Under Section 129(3) of CGST Act

HC ruled that minor e-way bill discrepancies without clear tax evasion intent do not warrant penalty under Section 129(3) of CGST Act. The court quashed ... Levy of Penalty u/s 129(3) of the Central Goods and Service Tax Act, 2017 - Errors in e-way bills - dispatch address mentioned in the e-way bill - Existence of Mens rea or not - HELD THAT:- A perusal of the order imposing penalty indicates that the original authority has stated that mens rea is not required for imposition of penalty. This view is not correct in law and the conclusion reached thereafter is obviously illegal - This Court in M/s Hindustan Herbal Cosmetics v. State of U.P. and Others [2024 (1) TMI 282 - ALLAHABAD HIGH COURT] held that mens rea to evade tax is essential for imposition of penalty. The orders impugned in this writ petition cannot be sustained in the eyes of law. Accordingly, the orders are quashed and set aside - Petition allowed. Writ under Article 226 challenging orders imposing penalty under Section 129(3) of the Central Goods and Services Tax Act, 2017 for alleged discrepancy in the e-way bill. Petitioner contends goods matched invoice and e-way bill, and there is no intent to evade tax; impugned orders record that 'mens rea is not required for imposition of penalty.' Court rejects that view, relying on precedent in M/s Hindustan Herbal Cosmetics v. State of U.P., holding that presence of mens rea for evasion of tax 'is a sine qua non for imposition of penalty.' Minor or typographical errors in the e-way bill (example: transposed digits) without further material suggesting intent cannot sustain penalty under Section 129. Consequently, impugned orders are quashed and set aside, and respondents directed to refund the tax and penalty deposited within four weeks.