The Allahabad High Court recently overturned an order that imposed tax and a corresponding penalty under Section 129(3) of the Central Goods and Services Tax Act, 2017 due to an error in the vehicle number entered on the e-way bill.
The Single Bench of Justice Rohit Ranjan Agarwal ruled that a minor discrepancy in the registration of a vehicle within a state on the e-way bill would not warrant penalty proceedings under Section 129 of the CGST Act, . As a result, the order passed by the detaining authority, as well as the first appellate authority, could not be upheld.
The petitioner’s counsel Shubham Agrawa argued that the situation involved the transfer of stock by the dealer from their unit in Gautam Buddha Nagar to a sales depot in Agra. It was further submitted that the goods were accompanied by all required documents and an e-way bill during transit.
The mistake occurred when the person in charge of the e-way bill accidentally entered the wrong vehicle number, UP-13T instead of HR-73.
Conversely, the respondent-revenue argued that a circular issued by the Commissioner in 2018 stated that if there was an error in entering the details of the transporter in the e-way bill, one or two digits could be disregarded by the taxing authorities.
The revenue representative further contended that, if the entire vehicle number entered on the e-way bill did not match the vehicle in transit, the dealer’s explanation could not be accepted. It was then pointed out that the vehicle registration number for the goods in transit was HR-73/6755, while the e-way bill showed UP-13T/6755.
The Allahabad High Court observed “As there is no dispute to the fact that it is a case of stock transfer and there is no intention on the part of dealer to evade any tax” and held that “the 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.”
The impugned order of detention and demand of Goods and Services Tax (GST) and penalty were resultantly quashed and set aside by the Single Bench of Allahabad High Court.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
