Penalties should not be Imposed solely for technical errors lacking any intent to evade tax
Facts: Rawal Wasia Yarn Dying, referred to as “the Petitioner,” failed to complete Part ‘B’ of the E-way Bill, a mandatory requirement under the GST rules. Despite the omission in the E-way Bill, the accompanying invoice for the goods contained comprehensive details about the transporting truck. There was a discrepancy between the goods and the invoice due to a technical mistake, not an intentional act to evade taxes. The Commissioner Commercial Tax penalized the Petitioner on May 24, 2022, under Section 129(3) of the UPGST Act. The penalty was upheld even after the Petitioner’s appeal on October 15, 2022. The Petitioner then filed a writ petition with the Allahabad High Court, arguing against the penalty under Section 129(3) of the CGST Act, emphasizing the technical nature of the mistake and the detailed truck information in the invoice.
Held: In Writ Tax No. 352 of 2023, the Allahabad High Court ruled in favor of the Petitioner. The Court acknowledged that the Petitioner’s invoice contained comprehensive details about the transporting truck, fulfilling the necessary informational requirements. The Court recognized the Petitioner’s mistake as technical, devoid of any intent to evade taxes. The Court concluded that penalizing the Petitioner under Section 129(3) of the CGST Act was unjustified. Referring to a similar case, the Court held that a mere failure to complete Part ‘B’ of the GST e-Way Bill, without any intent to evade taxes, should not result in penalties. The Court directed the tax authorities to return the Petitioner’s security within six weeks. As a result, the Court overturned the penalties imposed by the tax authorities, granting relief to the Petitioner.
Conclusion: The Allahabad High Court ruled in favor of Rawal Wasia Yarn Dying (the Petitioner), overturning the penalties imposed by the Commissioner Commercial Tax. The Court determined that the Petitioner’s failure to complete Part ‘B’ of the E-way Bill was a technical mistake without any intent to evade taxes, thus deeming the penalty under Section 129(3) of the CGST Act unnecessary. The Court directed the return of the Petitioner’s security and provided relief by overturning the penalties.
The copy of the order is as under:
