Court Quashes Penalty Over Minor E-Way Bill Error: No Intent to Evade Tax Found, Petition Allowed.

The HC of Allahabad quashed the penalty order and appellate authority's decision against the petitioner under the GST Act for a wrong vehicle number in the e-way bill. The court found no intent to evade tax, deeming the error minor. The writ petition was allowed, and the penalty was set aside.

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Issues:
Assailing penalty order under GST Act - Wrong mention of vehicle number in e-way bill - Interpretation of circular regarding errors in e-way bill.

Analysis:
The judgment by the High Court of Allahabad dealt with a writ petition challenging a penalty order under the Goods and Service Tax Act, 2017, based on the wrong mention of a vehicle number in the e-way bill. The petitioner, a registered dealer in electronic goods, was transporting goods from Agra to Mathura when the vehicle was intercepted due to a discrepancy in the e-way bill. The penalty order imposed a substantial amount, leading to an appeal that was dismissed by the appellate authority. The petitioner argued that the mistake in the e-way bill was unintentional and cited relevant case laws to support their claim of no tax evasion intent.

The Standing Counsel contended that the circular issued by the Commissioner in 2018 allowed for minor errors in transporter details but emphasized that a complete mismatch in vehicle registration numbers cannot be overlooked. The court examined the facts and the circulars to determine whether the incorrect entry of the vehicle number constituted a human error covered under the circulars. It was established that the goods were being legitimately transported, and the only discrepancy was in the vehicle registration number mentioned in the e-way bill.

Given that there was no intention to evade tax and the error was minor, the court concluded that the penalty imposed was unwarranted. The judgment highlighted that the authorities failed to establish any deliberate tax evasion by the dealer apart from the incorrect vehicle registration number in the e-way bill. Consequently, the court set aside the penalty order and the appellate authority's decision, granting relief to the petitioner. The writ petition was allowed, and the orders dated August 9, 2023, and October 31, 2023, were deemed unsustainable and quashed.

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