In a recent ruling, the Allahabad High Court addressed an issue related to the E-way bill under the Goods and Services Tax ( GST ). The court observed that providing a different address in the E-way bill instead of the consignee’s address could be attributed to human error. Noting the absence of any intention to evade tax, the court quashed the order.
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The bench of Justice Piyush Agrawal observed that “there is no finding recorded by any of the authorities below that there was a mens rea for evading payment of tax. Even before this Court, there is no pleading on behalf of the State that there was any intention to evade tax.”
The assessee-petitioner, Uttam Electric Store is engaged in the business of supplying electrical goods. It filed a writ petition challenging the order passed by the GST department. The assessee supplied goods to M/s Chandpur Enterprises Limited, Chandpur, Bijnaur, on 19.08.2019.
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The goods were consigned to M/s Udit Engineers, Aligarh, and an E-way bill was generated. However, the E-way bill mistakenly listed the place of delivery as “Chandpur (UP)” instead of Aligarh.
The assessee submitted that this was a human error, which could be avoided. Additionally, there were no discrepancies regarding the quality, quantity, or other details mentioned in the accompanying documents, such as the tax invoice and E-way bill.
The goods were detained on 21.08.2019 due to the address discrepancy, leading to proceedings under Section 129 of the Uttar Pradesh GST Act and the issuance of a show cause notice. A penalty order was subsequently passed on 21.08.2019, which the petitioner appealed. The appeal was dismissed on 30.09.2020.
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The assessee’s counsel, Suyash Agarwal contended that the lower authorities had not established any mens rea, which is essential for levying a penalty under Section 129(3) of the GST Act. The counsel referenced the judgments of the Court in Nancy Trading Company Vs. State of U.P. & 3 Others and Shyam Sel & Power Limited Vs. State of U.P. to support his argument.
The court found that the discrepancy in the E-way bill could indeed be a human error and noted the absence of any findings by the authorities regarding mens rea for tax evasion. The respondent’s counsel failed to provide any argument or evidence to suggest intentional tax evasion by the petitioner.
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The bench reiterated the observations from the case of Nancy Trading Company Vs. State of U.P. & 3 Others to support the decision of the court. Accordingly, the bench quashed the orders issued by the department. The department was directed to return back the amount if deposited within a period of one month.
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