Gaylord Packers India Pvt. Ltd Vs State of U.P. (Allahabad High Court)
The Allahabad High Court has quashed a penalty and detention order against a company, ruling that a minor clerical error in an e-way bill does not constitute tax evasion. The court’s decision in the case of Gaylord Packers India Pvt. Ltd Vs State of U.P. underscores the principle that the intent to evade tax, or mens rea, is a mandatory element for imposing a penalty under the GST Act.
The petitioner, Gaylord Packers India Pvt. Ltd., is a manufacturer and seller of polyester film. The company’s consignment was intercepted and seized on February 12, 2019, while being transported from Ghaziabad to Delhi. The reason for the seizure was a discrepancy in the documents. While the goods were accompanied by both a tax invoice and an e-way bill, the invoice number on the e-way bill was cited as ‘4671’ instead of the correct number, ‘4670’. All other details in the documents were found to be in order.
The company argued that this was a simple clerical or typographical error. In its defense, the petitioner’s counsel referred to a circular dated September 14, 2018, which advised tax officers against initiating proceedings under Section 129 of the GST Act for minor errors in document numbers on e-way bills. The counsel also cited previous judgments from the same court to support the argument that a minor error does not demonstrate an intent to evade tax.
