The Allahabad High Court, in M/s BMR Enterprises v. State of Uttar Pradesh & Ors., examined the legality of a penalty imposed under Section 129(3) of the Central Goods and Services Tax Act, 2017, on account of a discrepancy in the vehicle number mentioned in the e-way bill accompanying the goods in transit. The petitioner, a registered GST dealer engaged in trading electronic goods, was transporting goods from its unit at Agra to a purchaser at Mathura. The consignment was accompanied by a delivery challan, bilty, and a valid e-way bill.

During transit, the vehicle was intercepted by the mobile squad on the ground that the vehicle number mentioned in the e-way bill was UP 80 CT 7024, whereas the actual vehicle number was UP 83 CT 2724. Treating the discrepancy as a violation, the authorities detained the goods and vehicle and passed a penalty order dated 09 August 2023 under Section 129(3) of the Act, imposing tax and penalty aggregating to ₹2,67,970/-. The petitioner’s statutory appeal under Section 107 of the Act was dismissed by the appellate authority on 31 October 2023, leading to the filing of the writ petition.

The petitioner contended that the error in the vehicle number was a bona fide human mistake made at the time of generation of the e-way bill and that all other statutory documents were in order. It was further submitted that there was no intention whatsoever to evade tax. Reliance was placed on the decision of the Supreme Court in Assistant Commissioner (ST) v. M/s Satyam Shivam Papers Pvt. Ltd. and subsequent decisions of the Allahabad High Court in M/s Gobind Tobacco Manufacturing Corporation v. State of U.P. and M/s Ramdev Trading Company v. State of U.P., which held that minor procedural lapses without mens rea do not warrant penal action.

The High Court observed that the Department had failed to place any material on record to establish an intention on the part of the dealer to evade tax. The Court held that a minor discrepancy in the vehicle number, in the absence of any other incriminating circumstance, constitutes a clerical or human error and does not justify invocation of penal provisions under Section 129 of the Act. The Court further noted that the circulars issued by the GST authorities recognise that minor errors in e-way bills should not result in harsh penal consequences.

Accordingly, the High Court set aside the penalty order dated 09 August 2023 and the appellate order dated 31 October 2023, holding them to be unsustainable in law, and granted consequential relief to the petitioner.
The writ petition was allowed.

 SOURCE LINK
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