Deco Plywood Industries Vs State of U.P. And 2 Others (Allahabad High Court)
The Allahabad High Court has delivered a significant ruling by quashing penalty orders imposed on Deco Plywood Industries. The Court determined that a mere typographical error in the document number on an e-way bill, in the absence of any demonstrable intent to evade tax, does not warrant the imposition of penalties under the Goods and Service Tax Act, 2017. This decision effectively set aside the Additional Commissioner Grade-2 (Appeal)’s order dated June 17, 2022, and the Commercial Tax Officer’s penalty order dated February 1, 2021.
Deco Plywood Industries, a registered entity engaged in the trade of plywood and related products, was in the process of transporting goods to M/s Mahalaxmi Associates in Mumbai. The consignment, carried by Vehicle No. HR 58B 9542. DL1 AA 5332, was properly accompanied by all requisite documentation, including a tax invoice, a bilty, and an e-way bill, all uniformly dated January 27, 2021.
The incident leading to the penalty occurred on January 30, 2021, when the vehicle was intercepted by Goods and Service Tax authorities. The basis for the seizure order was identified as an incorrect entry in the e-way bill: the document/invoice number was listed as ‘2224’ instead of the correct number ‘0401’. Crucially, the authorities’ penalty imposition was solely based on this specific discrepancy. No other infractions were alleged, nor was there any accusation of an attempt by Deco Plywood Industries to evade tax. It was further noted by the Court that the e-way bill, bilty, and the tax invoice otherwise correlated accurately, and the consignee was also a registered dealer, reinforcing the absence of fraudulent intent.
