No Penalty leviable for mismatch of vehicle no in e-way bill in case of stock transfer – High Court
In a recent judgment, Hon’ble Allahabad High Court has deleted GST penalty u/s 129(3) of UPGST Act 2017 levied for mismatch of vehicle number in e-way bill holding that in case of stock transfer there can not be any intention to evade tax
ABCAUS Case Law Citation:
ABCAUS 4044 (2024) (05) HC
In the instant case, the Petitioner/assessee had challenged the penalty order passed by GST Authorities and the order passed by the appellate authority.
The petitioner was a registered dealer under the Goods and Service Tax Act, 2017 (the Act). The Petitioner was engaged in the business of manufacturing and sale of tyres. The Petitioner was making a stock transfer from its unit to a sale depot in another State.
The goods were being shifted through Truck No. bearing a registration of Rajasthan which was accompanying invoice, e-way bill and bilty. The mobile squad intercepted the goods and detained the vehicle in question along with the goods on the premise that in the e-way bill the vehicle number was bearing a entirely different registration number.
Accordingly, a detention order was passed. Thereafter, a penalty order under Section 129(3) of the Act was passed imposing tax and penalty of the same amount.
Against the said order, an appeal under Section 107 of the Act was preferred by the dealer before the Additional Commissioner which was dismissed.
Before the Hon’ble High Court the petitioner submitted that it was a case of stock transfer by the dealer from its unit from one State to sale depot in another State. The goods which were in transit were accompanied by necessary documents and the e-way bill. The only mistake on the part of the person in-charge who had downloaded the e-way bill was wrong entry of the Vehicle Number. Except this fact the goods were being transported along with all the necessary documents.
According to the Petitioner, there was no intention to evade the tax on behalf of dealer and reliance has been placed upon decision of the Apex Court which had been relied upon by Division Bench of the Hon’ble High Court.
On the other hand the GST Authorities contended that 2018 circular provides that in case of any mistake in entering details of the transporter in the e-way bill, one or two digit can be ignored by the taxing authorities, but where the entire digit as has been entered in the e-way bill is not matching with the vehicle in transit, the explanation afforded by the dealer cannot be accepted.
The Hon’ble High Court observed that the sole controversy was as to whether the wrong mention of number of Vehicle through which the goods were in transit and detained by the taxing authorities would be considered as a human error and will be covered under the circular No. 41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018, as the number mentioned in the e-way bill was entirely different and the mistake was clerical in nature.
The Hon’ble High Court further observed that it was not in dispute that goods were being transported by the dealer through stock transfer from its unit from one State to its sale depot at another State.
The Hon’ble High Court opined that since it was a case of stock transfer and there was no intention on the part of dealer to evade any tax, the minor discrepancy as to the registration of vehicle in State in the e-way bill would not attract proceedings for penalty under Section 129 and the order passed by the detaining authority as well as first appellate authority cannot be sustained.
The Hon’ble High Court held that impugned orders were unsustainable in the eyes of law and both the orders were accordingly set aside.
Download Full Judgment Click Here >>
- Income Tax demands raised subsequent to approval of Resolution Plan invalid – SC
- RBI appoints Indranil Bhattacharyya as Executive Director w.e.f. March 19, 2025.
- Statement recorded u/s 131(1A) instead of section 133A(iii) by survey team invalid
- ITAT not justified refusing additional evidence without a finding on their relevance
- SEBI to utilise DigiLocker as a means of reducing unclaimed assets in stock market.
