Typographical error in the e-way bill is a minor error therefore imposition of penalty under Section 129 of the GST Act is without jurisdiction and illegal– Allahabad High Court
In a recent judgment, the Hon’ble Allahabad High Court has quashed and set aside set aside a penalty order passed u/s 129(3) of UP GST Act holding that a typographical error in the e-way bill is a minor error.
ABCAUS Case Law Citation:
ABCAUS 3906 (2024) (03) HC
Important Case Laws relied upon by parties:
M/s. Varun Beverages Limited v. State of U.P. 2023 U.P.T.C. (113) 331
Assistant Commissioner (ST) and others vs. M/s. Satyam Shivam Papers Pvt. Ltd. And another 2022 U.P.T.C. (110) 269 (SC)
In the instant case, the assessee Petitioner had filed a Writ under Article 226 of the Constitution of India assailing the order passed by the Additional Commissioner, Commercial Tax, UP and the order of the imposition of the penalty passed by the Commercial Tax Officer (Mobile Squad).
The petitioner was a duly registered dealer under the Goods and Service Tax Act, 2017 (‘the Act’). The petitioner was supplying goods to another registered dealer Mumbai and the transaction was duly covered by a tax invoice, bilty and an eway bill.
The consignment of goods was sent by the petitioner in a Vehicle. When the vehicle was in transit, the same was intercepted by the mobile squad of Goods and Service Tax authorities. The seizure order was passed on the ground that the document/invoice number has wrongly been mentioned in the e-way bill as the e-way bill showed the document/invoice No. 2224 instead of 0401.
Apart from the above, there was no other infraction on the part of the petitioner. Furthermore, the authorities imposed penalty only on the ground that the document number was not mentioned correctly. There was no allegation of any attempt by the petitioner for evasion of tax as the e-way bill, bilty and the tax invoice were matching and the consignee was also a registered dealer.
The petitioner submitted that number 0401 was typed incorrectly as 2224, which is bilty number and it was obviously a typographical error. The Petitioner relied upon a coordinate Bench judgment of the Hon’ble High Court and also upon the judgment of the Supreme Court to support its case.
The Hon’ble High Court observed that in the present case, there was definitely an error with regard to typing of the document/invoice number and there was a difference of four digits instead of the permitted two digits (as per the government circular).
The Hon’ble High Court stated that law is not to remain in a vacuum and has to be applied equitably in appropriate cases. The judgment of the Co-ordinate Bench may be referred to for this purpose where the sole controversy was as to whether the wrong mention of number of Vehicle Number 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 Circular No. 49/23/2018-GST dated 21.06.2018 which specifies the procedure for interception of conveyances for inspection of goods in movement, and detention, release and confiscation of such goods and conveyances.
In the said case, the Bench had held that 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. Particularly when the Department has not placed any other material so as to bring on record that there was any intention on the part of the dealer to evade tax except the wrong mention of part of registration number of the vehicle in the e-way bill.
Further the Hon’ble High Court observed a judgment of the Hon’ble Supreme Court where their lordships has examined the applicability of the issue of mens rea under Section 129 of the Act.
The Hon’ble High Court opined that the principle that emerges from the judgments relied upon by the Petitioner is that presence of mens rea for evasion of tax is a sine qua non for imposition of penalty. A typographical error in the e-way bill without any further material to substantiate the intention to evade tax should not and cannot lead to imposition of penalty. In the present case, instead of ‘0401’, ‘2224’ was incorrectly entered into the e-way bill which clearly appears to be a typographical error. In certain cases where lapses by the dealers are major, it may be deemed that there is an intention to evade tax but not so in every case. Typically when the error is a minor error of the nature found in this particular case, the imposition of penalty under Section 129 of the Act is without jurisdiction and illegal in law.
Accordingly, the impugned orders were quashed and set-aside and the writ petition was allowed.
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