The Allahabad High Court quashed the penalty under GST while stating that there was human error in mentioning place of delivery in e-way bill.
The bench noted that it is not in dispute that the purchaser was of Chandpur, but the goods were to be consigned to M/s Udit Engineers, Aligarh. When the goods were onward journey, the same were intercepted as in the e-way bill, the place of delivery was mentioned as Chandpur (UP), instead of Aligarh. This error can occur due to human error while filling up the form/e-way bill. Further, there is no finding recorded by any of the authorities below that there was a mens rea for evading payment of tax. Even before the Court, there is no pleading on behalf of the Sate that there was any intention to evade tax.
The court in Nancy Trading Company has observed that while transiting the goods in question all documents as required under Rule 138 A of the Rules were accompanying with the goods. Only a technical error has been committed by the petitioner for not generating E Tax Invoice before movement of goods in question. It is not in dispute that Waybill was generated. It is not the case of the Revenue that there was any discrepancy with regard to quality and quantity of the goods as mentioned in Tax Invoice, E Waybill as well as G.Rs accompanying the goods. The error committed by the petitioner for not generating E Tax Invoice before movement of goods is a human error. It is also not in dispute that prior to 1st August, 2022 the dealers who were having annual turn over of more than Rs. 20 crores was required to issue E Waybill. The said limit has now been reduced with effect from 1st August, 2022 to Rs. 10 crores, hence there was bona fide mistake on the part of the petitioner for not generating E Tax Invoice but in absence of any specific finding with regard to mens rea for evasion of tax, the proceeding under section 129 (3) of the Act should not have been initiated. On the pointed query to the standing counsel as to whether any finding was recorded by the authorities at any stage with regard to mens rea for evasion of tax has been recorded, the answer was very fairly in negative.
In view of the above, the court held that in absence of any finding with regard to mens rea the proceeding under section 129(3) of the Act cannot be initiated.
Submissions
Counsel for the petitioner submitted that the petitioner is engaged in the business of supply of electricals goods. On 19.08.2019, the petitioner supplied electrical goods to M/s Chandpur Enterprises Limited, Chandpur, Bijnaur, which was consigned to M/s Udit Engineers, Aligarh, to which e-way bill was also generated, but in the e-way bill, the place of delivery was mentioned as “Chandpur (UP)”, instead of the consignee of Aligarh, namely, M/s Udit Engineers.
He further submitted that the said error was human error, which could be ignored.
He further submitted that there is neither any discrepancies with regard to quality, quantity or any other details mentioned in the accompanying documents, such as, tax invoice, e-way bill, etc. The goods were detained on its onward journey, on 21.08.2019, on the ground that the goods were being dispatched on a place different than mentioned in the documents. Thereafter, proceedings under section 129 of the UPGST Act were initiated and show cause notice was issued. On 21.08.2019, the penalty order was passed, against which the petitioner preferred an appeal, which has been dismissed.
counsel for the petitioner submitted that the authorities below have not recorded any finding with regard to mens rea, which is essential for levying the penalty under section 129(3) of the GST Act.
ACSC supported the orders and submitted that the proceedings have rightly been initiated against the petitioner as the goods accompanied were not as per the Act and the Rules as there was discrepancy. The goods were consigned to Aligarh, but in the accompanying document, i.e., e-way bill, the place of delivery was mentioned as Chandpur (UP).
Conclusion
The bench quashed and set aside the orders.
Case Details
Case Name: M/S Uttam Electric Store v/s State Of U.P. And 2 Others
Citation: WRIT TAX No. – 153 of 2021
Counsel for Petitioner : Suyash Agarwal
Counsel for Respondent : C.S.C.
Court: Allahabad High Court
Judge: Justice Piyush Agrawal
Decision Date: 26/07/2024
