Penalty Orders Quashed; No Intent for Tax Evasion Found in E-Way Bill Error, Refunds Ordered Within a Month.

The HC quashed the penalty orders dated 30.09.2020 and 21.08.2019 under section 129 of the UPGST Act, finding no mens rea for tax evasion. The error in the e-way bill was deemed a human mistake, not warranting penalties. The petitioner's writ petition was allowed, and any deposited amounts were ordered to be refunded within a month.

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Issues: Challenge to penalty orders under section 129 of the UPGST Act due to discrepancy in e-way bill mentioning the wrong place of delivery.

Analysis:
The petitioner, engaged in the supply of electrical goods, challenged penalty orders dated 30.09.2020 and 21.08.2019 issued by the respondents for an error in an e-way bill. The goods were consigned to Aligarh but the e-way bill mentioned Chandpur (UP) as the place of delivery. The petitioner argued that the error was unintentional and did not affect the quality or quantity of the goods. The authorities did not establish mens rea for tax evasion, as required under section 129(3) of the GST Act. The petitioner cited precedents like Nancy Trading Company Vs. State of U.P. & 3 Others and Shyam Sel & Power Limited Vs. State of U.P. to support their case.

The ACSC supported the penalty, stating that the discrepancy in the e-way bill justified the penalty under the Act and Rules. The goods were seized, and no response was submitted post-detention. However, the Court noted that there was no intention to evade tax, and the error in the e-way bill was likely due to human error. The absence of mens rea for tax evasion was crucial in determining the validity of the penalty orders.

Referring to the judgment in Nancy Trading Company, the Court emphasized that technical errors, without intent to evade tax, should not warrant penalties under section 129(3) of the Act. The Court quashed the impugned orders dated 30.09.2020 and 21.08.2019, as there was no evidence of deliberate tax evasion and the error in the e-way bill was deemed a human mistake. The petitioner's writ petition was allowed, and any amount deposited during the proceedings was ordered to be returned within a month.

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