GST Vidhi | GST Case Law

Human Error in E-Way Bill Does Not Imply Tax Evasion: Allahabad HC Quashes GST Penalty in Vishnu Singh Case

Introduction

The GST regime in India is structured to enable seamless flow of goods through transparency and technology-driven compliance tools like e-way bills. However, the system must also recognize human fallibility. In the landmark case of M/s Vishnu Singh vs State of U.P. and Others, the Allahabad High Court reiterated that technical errors or clerical mistakes in e-way bills—absent intent to evade tax—cannot justify punitive action under Section 129(3) of the GST Act.

 

Case Snapshot

• Case Title: M/s Vishnu Singh vs State of U.P. and Others
• Writ Tax No.: 599 of 2024
• Neutral Citation No.: 2025:AHC:24812
• Court: High Court of Judicature at Allahabad, Court No. 2
• Judgment Reserved: —
• Judgment Delivered: 20 February 2025

 

Facts of the Case

The petitioner, M/s Vishnu Singh, a proprietorship firm engaged in civil construction works, purchased 24.948 kg of durapave bitumen from M/s Indian Oil Corporation, Mathura, on 29 August 2023.

Key events unfolded as follows:

• The e-way bill generated on 29.08.2023 mistakenly reflected SAP Document No. 770455482 instead of the actual tax invoice number due to a technical/human error.
• On 30.08.2023, while goods were being transported from Mathura to Mirzapur, the vehicle was intercepted at Anant Ram Toll Plaza, Etawah.
• Authorities found no discrepancy in the goods, tax invoice, bilty, or transporter documents—only the mismatch in the invoice number between the e-way bill and physical invoice was cited.
• A penalty was imposed under Section 129(3) of the GST Act by order dated 04.09.2023.
• The appeal filed by the petitioner was rejected on 20.03.2024, prompting the present writ petition.

 

Petitioner’s Arguments

Represented by Shri Rishi Raj Kapoor, the petitioner raised the following contentions:

1. Clerical Error, Not Malicious Intent

• The wrong mention of SAP Document No. in place of the tax invoice number on the e-way bill was due to human error.
• The SAP document number was also included on the tax invoice, so there was no discrepancy in identifying the goods.

2. No Other Deficiency

• All documents such as tax invoice, bilty, and consignment note were valid and present.
• The authorities did not point out any inconsistency in quantity, value, or description of goods.

3. Absence of Mens Rea

• No finding was recorded by the tax authorities indicating that the petitioner intended to evade tax.
• Without proving intent to evade, penalty under Section 129(3) is not sustainable.

4. Purpose of E-Way Bill

• The e-way bill's primary role is to inform the department about goods in transit to prevent tax evasion.
• This objective was met in the present case.

5. Reliance on Precedents

• Relied on:
• M/s Zhuzoor Infratech Pvt. Ltd. vs Addl. Commissioner (Writ Tax No. 830/2024, decided on 14.02.2025)
• M/s Sun Flag Iron & Steel Co. Ltd. vs State of U.P. (2023:AHC:215906)

 

Respondent’s Contentions

The State opposed the petition, arguing that:

• The petitioner had violated Rule 138 by failing to correctly generate the e-way bill.
• The mismatch between invoice and e-way bill warranted initiation of penalty proceedings.
• The e-way bill was never corrected or updated, even after interception.

 

Key Observations by the Court

Justice Piyush Agrawal carefully examined the facts and made the following crucial observations:

1. Admitted Clerical Discrepancy

• The mismatch related only to the invoice number—SAP document number was entered instead, which was not a fake number, but actually present in the tax invoice.
• Thus, it was not a deceptive entry, but a labeling error.

2. No Other Infirmity

• The goods matched the tax invoice.
• No discrepancy was found in description, quality, or quantity.

3. Absence of Intent to Evade

• The entire record lacked any mention or evidence of intention to defraud or evade tax.
• The sole basis for penalty was a technical misstatement—not a justifiable ground under Section 129.

 

Court’s Reliance on Precedents

1. Zhuzoor Infratech Pvt. Ltd. (Writ Tax No. 830/2024)

“The purpose of e-way bill is to inform the department about movement of goods… If it’s not canceled within its validity, the genuineness of transaction cannot be questioned.”

2. Sun Flag Iron & Steel Company Ltd. (2023:AHC:215906)

“Once the e-way bill has not been canceled and was in existence during interception, the movement of goods and genuineness of transaction stand verified.”

 

Key Takeaways from the Judgment

• Clerical mistakes in an e-way bill do not imply fraud.
• No penalty can be levied under Section 129(3) unless there is clear evidence of intent to evade tax.
• The objective of the e-way bill is achieved once the goods’ movement is transparent and trackable, even if one field is erroneous.

 

Final Verdict

The High Court delivered the following ruling:

• The impugned penalty order dated 04.09.2023 and appellate order dated 20.03.2024 were quashed.
• The writ petition was allowed.
• The petitioner is entitled to a refund of any amount deposited pursuant to the impugned orders.

 

Conclusion: GST Enforcement Should Respect the Spirit of Law

This judgment reaffirms that GST compliance mechanisms like the e-way bill are tools for transparency, not traps for technical slips. In absence of any fraudulent intention or tax evasion, penalty provisions must be applied judiciously.

The Court rightly protected the petitioner’s interest by quashing proceedings based solely on a harmless human error.

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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