In WRIT TAX No.958 of 2019-ALL HC- Proceedings for penalty u/s 129 of CGST Act would not be attracted in case of minor discrepancy regarding registration of vehicle in e-way bill
Justice Rohit Ranjan Agarwal [02-02-2023]

Read Order: M/S Varun Beverages Limited Vs. State Of U.P. And 2 Others 

LE Correspondent

Prayagraj,  February 22, 2023: The Allahabad High Court has quashed a penalty order passed u/s 129(3) of the GST Act,  2017 after noting that that there was no intention on the part of the dealer to evade tax and he had only incorrectly mentioned part of registration number of the vehicle in the e-way bill. 

The facts of the case before the Single-Judge Bench of Justice Rohit Ranjan Agarwal was such that the petitioner, a registered dealer under the Goods and Service Tax Act, 2017, engaged in the business of manufacturing and sale of aerated water, fruit juice based drinks etc. was making a stock transfer from its unit at Greater NOIDA depot to a sale depot at Agra. The goods were being shifted through a Truck which was accompanying delivery challan, 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 had been mentioned as UP-13T/6755. Detention and penalty orders were passed under Section 129(3) passed imposing a tax of Rs 1,86,834  and penalty of the same amount, totaling Rs 3,73,668. 

Against the said order, an appeal under Section 107 of the Act was preferred by the dealer before the Additional Commissioner, Grade-II (Appeal-III) Commercial Tax, Agra. The appeal was dismissed and hence,  the writ petition was filed before the High Court.

The issue before the Bench was whether the wrong mention of number of Vehicle No. HR73/6755 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 April 13, 2018 and 49/23/2018-GST dated June 21, 2018, as the number mentioned in the e-way bill was UP-13T/6755 and the mistake was of only of HR-73 in place of U.P.-13T.

The Bench  opined that it was a case of stock transfer and there was no intention on the part of dealer to evade any tax and held, “.... 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.”

Noting that the Department had not placed before the Court 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 eway bill, the Bench observed that vehicle through which the goods were transported and the bilty showed the one and the same number while only there was a minor discrepancy in Part-B of the e-way bill where the description of the vehicle was entered by the dealer.

Thus, setting aside the impugned orders ,the Bench allowed the petition.