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Mistake in E-Way bill and its repercussion
E-Way bill is mandatory if transaction value is exceeds above specified limit. In E-Way bill, we required to give information like place of supply, type of supply, purpose of supply, distance, quantity, Value, etc. base on distance, validity on E-Way bill is calculated. Which mistake is acceptable in E-Way bill, what are the consequences if such mistake is taken place? We are discussed in this article.
What happens if type of Supply is wrongly entered?
In Goodwear Fashions (P) Ltd, while generating E-Way bill type of supply is selected as inward supply instead of outward supply. Assitant commissioner demanded integrated tax and Penalty of Rs 1,29,915 each under section 129. However the case is appeal before the tribunal. Tribunal has quashed the order of Assitant commissioner demanding integrated tax and Penalty of Rs 1,29,915 each under section 129 and instead levied a general penalty of Rs 1,000/- on the Appellant.
What happens if there is mistake in entering the distance?
This issue is solved under the following the case-
Name of the applicant: Godrej Consumer products Ltd
Facts of the case –
- Supplier has received the order and he has generated the E-Way bill by entering the all the details and supplier had handed over said goods to Transporter for transporting the same from Puducherry to Himachal Pradesh.
- When the said consignment was entered into Kotla, Barotiwala on 15th Sept 2018 at 10:50am, the inspection team intercepted and detained the vehicle by alleging that, the aforementioned consignment was accompanied with expired e-way Bill which is contravention of Rule 138 of CGST and HPGST Rules 2017, hence attracts penal action u/s 129(1) of Acts. Subsequently the ld. ACST&E has passed detention order on the same day i.e. 15-09-2018 in the FORM MOV-6 u/s 129 of IGST Act 2017. By which he has been seized the goods along with vehicle.
- In pursuance of above order, applicant attend it and explained that, the consignment was accompanied with proper invoices along *with e-way bill, however due to typographical error while generating the E-way bill, it had mentioned approx. Distance 20KM instead of 2000 KM, as a result, the validity of e-way bill are perfectly correct and consistent with the invoice and the consignment.
- The appellant representative attended in person on 19-09-2018 before However, “Ld AC” has not appreciated the facts and circumstance evidence produced by the appellant and initiated proceeding towards proposing the demand along with penalty
- At outset Appellant submitted that the impugned order passed by the Ld. AC is illegal and not sustainable. The Ld. AC failed to appreciate the facts, legal provisions and judicial precedents applicable in the present case. Hence impugned order is liable to be set aside and consequent relief ought to be granted to the Appellant. In support the contentions, the Appellant would like to make the following submissions which are without prejudice to and independent of each other.
Observation and discussion:
- The appellate authority gone through the section and observed that procedure for E-way bill has been prescribed under Rules 138 to 138D of the CGST Rules, 2017. As per the said provisions, every registered person who causes movement of goods of consignment should follow below procedures before and during the commencement of the goods transport.
- Also as per Section 129 of CGST Act, 2017, where any person transports any goods or stores any goods while they ore in transit in contravention of the provisions of this Act or the rules made there under, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure, further said section has been prescribed the procedure and manner for the proceeding in case of certain defaults under the law.
- Authority has observed that the appellant has duly complied the procedure specified in the Rule 138 of the CGST and HPGST of rule 2017. The appellant had generated E-way bill through online portal before the commencement of goods transport and mentioned all the essential information as required to the procedure for E-way bill. The person who was in charge of conveyance of the consignment had carried all the prescribed set of documents and produced the same before the inspection authority when they sought for the inspection. It is abundantly clear that, the appellant has followed the procedure absolutely and is not contravention of the Rule 138 of the CGST and HPGST of the Rule 2017 as alleged in the impugned order hence invoking the Section 129 of CGST/HPGST is not sustainable.
- However, the appellant has admitted that, a typographical error had taken place while generating the E-way bill, and as a result of which the distance between locations from Puducherry to Hmachal Pradesh had mentioned approx. Distance 20 KM of 2000 KM. As a result of the said error, the validity of e-way bill was set for only one day and subsequently it got expired on 08-09-2018 although all other details mentioned in the e-way bill are correct and consistent with the invoice and the consignment. However, “Ld.AC” has not appreciated facts and circumstance evidence produced by the appellant and passed the impugned order.
- Appellant has also submitted that the said typographical error was noticed by the Appellant when intercepted and inspected the documents. It was not be possible to the Appellant to rectify the error at that point in time as the time limit for rectification had lapsed.
- Also as per GST Council vide circular No 64/38/2018 dated 14thSeptember, 2018 and State government vide circular No 12-25/2018-19-EXN-GST-(575)-6009-6026 DT 13.03.2019 effective w.e.f 14.09.2018, in para 5 provides that in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under section 129 of the CGST Act may not be initiated in case of minor mistakes like Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill or Error in the address of the consignee to the extent that the locality and other details of the consignee are correct. Further Para 6 of the said circular states that in case of minor errors mentioned in Para 5, penalty to the tune of Rs. 500/- each under section 125 of the CGST Act and the respective State GST Act should be imposed (Rs.1000/- under the IGST Act) in FORM GST DRC-07 for every consignment.
- As per the circumstantial evidence and as per the decision of Hon’ble Kerala High Court, it appears that the mistake in entering distance in E-way bill is a typographic error and may be treated as a minor one. Therefore, the appeal of the appellant is accepted and the order of the Assistant Commissioner State Taxes & Excise —Cum proper officer Baddi Circle-II is set aside. The additional demand of Rs. 1,54,798/-(IGST-77,399/- + penalty INR 77,399/-) deposited by the appellant may be refunded and the penalty of Rs. 500/- under SGST and Rs. 500/- under CGST u/s 125 of CGST/HPGST Act, 2017 is imposed on the Appellant.
Conclusion: one should be very careful while entering the details on E-Way bill portal otherwise its implication is more and one may incur heavy litigation charges to sort the issue.
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