Minor Typographical Error in E-Way Bill Does Not Justify Penalty
Under Section 130 of the GST Act
Introduction
In a significant ruling
by the Allahabad High Court, Lucknow Bench, the case of M/s
Perception Traders vs. State of U.P. reaffirmed that minor clerical or
typographical mistakes in e-way bills do not automatically invite penalties
under Section 130 of the CGST Act, which deals with confiscation of goods
and conveyance. The dispute arose when a transporter carrying goods on behalf
of M/s Perception Traders mentioned an incorrect vehicle number on the e-way
bill—an omission of a single letter "C". Despite valid documentation
and no evidence of tax evasion, a penalty order was issued. Upon appeal, the
Hon’ble High Court quashed the penalty, holding that inadvertent mistakes
lacking fraudulent intent cannot lead to confiscation. This judgment
reinforces a taxpayer-friendly interpretation of GST procedural law.
1. Case
Overview
- Name of the Case:
M/s Perception Traders, Allahabad Through Proprietor Ram Dutt Mishra vs.
State of U.P. & Others
- Case Number:
Writ Tax No. 380 of 2025
- Date of Judgment:
24th April 2025
- Court:
High Court of Judicature at Allahabad, Lucknow Bench
- Judge:
Hon’ble Mr. Justice Pankaj Bhatia
- Citation:
Neutral Citation No. 2025:AHC-LKO:23303
2.
Background and Facts of the Case
The petitioner, M/s
Perception Traders, is a registered proprietorship operating out of
Allahabad, Uttar Pradesh. It was engaged in the movement of goods, for which an
e-way bill was duly generated. The issue arose during the transit of goods,
when the transport vehicle was intercepted by GST officials. A penalty was
imposed under Section 130 of the CGST Act, alleging discrepancies in the
documentation.
The two issues identified
by the officials were:
1. A
slightly incorrect GSTIN number.
2. A
mismatch in the vehicle number listed in the e-way bill.
The GSTIN discrepancy was
subsequently accepted by the authorities as a non-issue. However, the mismatch
in the vehicle number became the central ground for invoking penal
provisions.
- The vehicle number in the e-way bill
was written as UK 06 A 9478.
- The actual number was UK 06 CA
9478—a difference of a single alphabet ("C").
Despite the availability
of a valid invoice and the rest of the e-way bill details being accurate,
authorities proceeded to levy a penalty and later dismissed the appeal due to
delay in filing.
3. Legal
Issues Raised
The Court considered the
following questions:
1. Does
a minor typographical error in vehicle number constitute sufficient ground for
penalty under Section 130?
2. Can
the procedural bar of limitation override substantive justice, especially in
cases lacking tax evasion intent?
3. Were
the principles of proportionality and natural justice observed in penalizing
the petitioner?
4.
Submissions by the Petitioner
The petitioner,
represented by Shri Dhiraj Dwivedi, made the following key arguments:
- The error in the vehicle number
was inadvertent, typographical, and did not indicate intent to evade
tax.
- The actual goods and vehicle were
traceable and under no circumstance was there an attempt to conceal or
divert the consignment.
- The GSTIN mismatch was a
non-issue, already resolved in favor of the petitioner.
- All other documents—invoice, e-way
bill, and registration papers—were properly aligned.
- The penalty order under Section
130, which requires intent to evade, was unwarranted.
- Strong reliance was placed on the
ruling in M/s Hindustan Herbal Cosmetics v. State of U.P. (02.01.2024),
where the High Court held that minor typographical errors do not
justify invoking Section 130.
5.
Submissions by the Respondent
The learned Standing
Counsel, representing the State authorities, responded as follows:
- The vehicle number mismatch was
indeed a deviation from the documented details.
- Authorities were within their
statutory right to issue a penalty.
- The appeal filed by the petitioner
was time-barred, and no condonation request was considered.
However, crucially:
- The respondent did not dispute the
factual correctness of the documents.
- The State did not counter the
reliance on the Hindustan Herbal Cosmetics case, which had already set
a precedent.
6. Relevant
Legal Provisions
Section 130, CGST Act,
2017
This section relates to:
- Confiscation of goods and conveyances
- Levy of penalty
- It is applicable only when there
is an intent to evade tax.
Thus, mens rea
(guilty mind) is an essential ingredient. Mere procedural lapses without
fraudulent intention do not justify penalty under this section.
7. Court’s
Analysis and Findings
Hon’ble Justice Pankaj
Bhatia analyzed the issue by comparing it to the ruling in M/s Hindustan
Herbal Cosmetics, and held:
- The difference between UK 06 A
9478 and UK 06 CA 9478 is a minor clerical lapse.
- Such error does not reflect any
malafide intention or tax evasion attempt.
- The respondent’s order dated
14.02.2024 imposing penalty, and the dismissal of appeal on
11.11.2024, were unsustainable in law.
- The High Court reiterated that in
the absence of mens rea, no penalty under Section 130 can be imposed.
- The dismissal of the appeal on
limitation grounds was not in the interest of justice, especially when
no serious prejudice was caused to the revenue.
8. Court’s
Decision and Directions
The Court ruled:
“The judgment in the case
of M/s Hindustan Herbal Cosmetics is squarely applicable to the facts of the
present case also. Thus, relying on the said judgment, both the orders dated
14.02.2024 & 11.11.2024 are quashed. The amount already deposited shall be
refunded to the petitioner on his moving an appropriate application. Present
petition stands allowed in above terms.”
Result:
- Penalty quashed
- Appeal dismissal reversed
- Amount deposited to be refunded
9.
Conclusion
This judgment provides
important jurisprudential clarity in the GST regime. It reinforces the
principle that:
- Penalties under Section 130 should
not be imposed for minor, technical errors.
- Intent to evade tax must be proven
before invoking such harsh provisions.
- Proportionality matters—not
all mistakes deserve the same punishment.
The ruling strikes a
balance between compliance enforcement and taxpayer rights, echoing the
growing judicial sentiment that laws should not become instruments of
oppression due to clerical oversight.
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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