Allahabad High court establishes a rule of no penalty for minor typo errors in e-way bills
FACTUAL MATRIX: The petitioner is a duly registered supplier of cosmetic products in the state of U.P., the same upon being transported to the state of Jharkhand were seized by the authorities on the ground that the vehicle number in the e-way bill is mismatched by 2 digits from the actual vehicle transporting the goods.
The Counsel for the petitioner contended that it is a typical case of typographical error and the same was pointed out in the impugned order. The counsel argued that the factual background of the case is akin to the court’s decision in Varun Beverages Limited v. State of U.P., the Counsel for Respondent argued that the previous judgement was that of stock transfer hence the court cannot rely upon the same.
VERDICT: The court observed that the error claimed by the authorities is of mere 3 digits (rather than 2 as furnished in the circular) and these digits were merely jumbled in a manner considered to be a legitimate human error, hence, the law is not to remain in a vacuum and has to be applied equitably in appropriate cases.
The court while setting the aside the impugned circular and penalty under section 129 of CGST Act, 2017 reiterated that the intention to evade tax is a sine qua non for imposition of penalty, further the court ruled that a typographical error in the e-way bill without any further material to substantiate the intention to evade tax should not and cannot lead to the imposition of penalty.
Moreover, in certain cases where lapses by the dealers are major, it may be deemed that there is an intention to evade tax but not so in every case. Typically, when the error is a minor error of the nature found in this particular case.
CASE TITLE : M/S Hindustan Herbal Cosmetics v. State of U.P. And 2 Others CASE NUMBER : Weit Tax No – 1400 of 2019
The copy of the order is as under:
