Minor
errors without evidence of tax evasion, should not lead to penalties under
Section 129 of the CGST Act - High Court of Judicature at Allahabad
By Yogesh Verma (CS/LLB) / 2 min read / GST Case Law
Case No.: WRIT TAX No. 788 of
2024
Petitioner: M/S BMR Enterprises
Respondents:
1. State
of Uttar Pradesh
2. Commercial
Tax Officer-2 (Mobile Squad), Range-IV, Agra
3. Additional
Commissioner Grade-II (Appeal)-2, Agra
Counsel for Petitioner:
Rahul Agarwal
Counsel for Respondent:
C.S.C.
Court: High Court of
Judicature at Allahabad (Court No. 1)
Date of Order: 14th May 2024
Judging Authority: Hon'ble Shekhar B.
Saraf, J.
Summary
of the Case: M/S BMR Enterprises,
a dealer in electronic goods, challenged a penalty imposed under Section 129(3)
of the CGST Act, 2017, for an error in the vehicle number mentioned in the
e-way bill during the transport of goods. The court ruled in favor of the
petitioner, holding that the discrepancy was a human error without intent to
evade taxes and quashed the penalty.
Facts
of the Case:
1. Nature
of Business: M/S BMR Enterprises
is a registered GST dealer trading in electronic goods.
2. Transaction: Goods were transported from Agra to M/S Rawat
Sales in Mathura on 8th August 2023.
3. Documentation
Accompanied by:Delivery challan, E-way
bill, Bilty
4. Interception: The vehicle was detained on 9th August 2023
due to a mismatch in the vehicle number: E-way bill mentioned UP 80 CT 7024
instead of the correct number UP 83 CT 2724.
5. Penalty
Imposed: A total of ₹2,67,970
in tax and penalty was imposed.
6. Appeal: The petitioner appealed under Section 107 of
the CGST Act, which was dismissed by the Additional Commissioner on 31st
October 2023.
Submission
by the Petitioner:
1. The wrong vehicle number was a human error by
the person generating the e-way bill.
2. The discrepancy did not result in tax evasion
as all necessary documents were present.
3. Relied on precedents:
·
Assistant Commissioner
(ST) vs. M/s Satyam Shivam Papers Pvt. Ltd.: Highlighted that penalties require
intent to evade tax.
·
M/s Gobind Tobacco
Manufacturing Corporation vs. State of U.P.: Minor errors without intent to
evade tax should not attract penalties.
·
M/s Ramdev Trading
Company vs. State of U.P.: Similar judgment on human error in documentation.
Submission
by the Respondent:
·
The 2018 circular
allows minor discrepancies of one or two digits in vehicle numbers but does not
condone larger errors.
·
The entered number (UP
80 CT 7024) was completely different from the actual number (UP 83 CT 2724),
making the explanation unacceptable.
Findings
and Judgment:
1.
Legal Analysis:
·
The court emphasized
the absence of mens rea (intent to evade tax).
·
Minor errors like a
discrepancy in the vehicle number, without evidence of tax evasion, should not
lead to penalties under Section 129 of the CGST Act.
2. Judgment:
·
The penalty and
appellate orders (dated 9th August 2023 and 31st October 2023) were quashed.
·
Consequential reliefs
were directed to be provided to the petitioner.
3.
Reasoning:
·
Cited the principle
that the law should consider human errors when there is no evidence of
fraudulent intent.
·
Highlighted that other
documents, such as the bilty and delivery challan, were correct.
Conclusion: The court reiterated that procedural
discrepancies without intent to evade tax should not attract penalties. It
directed the authorities to provide relief to the petitioner, ensuring that
minor errors do not override the principles of equity and justice.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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