A division bench of the Punjab and Haryana High Court has held that a discrepancy in the quantity of goods mentioned in the E-Way Bill under GST cannot attract Section 129 of the CGST Act, 2017.
The petitioner is engaged in the business of copper wires and copper scraps, which are purchased from dealers located throughout the country and he is registered under Delhi GST Act, 2017/Central GST Act, 2017. The petitioner claims that in the ordinary course of business, he sold copper scraps to M/s R.N.T. Metals Pvt. Ltd., Bhiwadi (Rajasthan) for an amount of Rs.83,69,594/- (including IGST @ 18%). While the aforesaid goods were in transit in Vehicle No.HR-55S-1938, the same were intercepted by respondent No.4 at Manesar on 27.11.2021. The goods were accompanied by valid Invoice No.RM/64/21-22 and e-way bill, as contemplated under the Act. On the asking of the Authorities, the said documents were produced however the vehicle carrying goods was ordered to be stationed and Form GST MOV-02 was issued.
The department contended that on physical verification discrepancy was found in the actual quantity and the quantity shown in the Invoice and e-way bill. The actual quantity was found to be 90 kgs. 700 gms. more than what has been found as per the Invoice. Thus, she claims that by showing lesser quantity the petitioner intended to evade tax.
Justice Ajay Tewari and Justice Pankaj Jain held that “In light of the fair stand taken by the petitioner and the fact that the mismatch cannot be termed as a contravention of the provisions of the Act, we deem it appropriate to allow the present writ petition. Proceedings against the petitioner under Section 129 of the Act are hereby quashed. Fine and penalty, if any, imposed against the petitioner and deposited by him, be refunded to him within a period of 15 days from the date of receipt of the certified copy of this order. Since goods already stand released, no further order is required.”
While concluding, the bench held that “Keeping in view these circumstances, it cannot be said that the petitioner had any intent to evade the tax or the mismatch in the quantities is of such nature which shall entail proceedings under Section 129 of the Act. A person, who has already paid a tax of Rs.1276717.68/- on a consignment cannot be said to have an intent to evade tax amounting to Rs.11000/-. At this stage, Mr. Goyal states that the petitioner is ready to pay even the tax and penalty imposed by the State-Authorities which comes to be around Rs.22000/-.”
M/s Raghav Metals vs State of Haryana & Others
CITATION: 2022 TAXSCAN (HC) 165
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