The Hon’ble Allahabad High Court in M/s. Varun Beverages Limited. v. State of U.P. and Ors. [Writ Tax No. – 958 of 2019 dated February 2, 2023] has set aside the order imposing the penalty upon the assessee, on the grounds that, there was no intention on the part of the assessee to evade taxes. Held that, minor discrepancy in mentioning the registration number of the vehicle in the e-way bill would not attract proceedings for penalty under Section 129 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).
M/s. Varun Beverages Ltd. (“the Petitioner”) is engaged in the business of manufacturing and sale of aerated water, fruit juice based drinks etc. (“the Goods”). The Petitioner was making a stock transfer from its Greater Noida depot to a sale depot at Agra through a truck accompanying delivery challan, e-way bill and bilty on June 10, 2018. The Revenue Department (“the Respondent”) intercepted the Goods and detained the vehicle on June 10, 2018, on the grounds that the vehicle number mentioned in the e-way bill was different.
Subsequently, the Respondent passed the detention order on June 11, 2018 and an Order-in-Original dated June 12, 2018 (“the OIO”) under Section 129(3) of the CGST Act, imposing tax and penalty of INR 3,73,668/-. The Petitioner had preferred an appeal before the Appellate Authority but the same was dismissed vide Order-in-Appeal dated July 1, 2019 (“the OIA”).
Being aggrieved, this petition has been filed.
The Petitioner has contended that it was a case of stock transfer by the Petitioner from its unit at Greater Noida to sale depot at Agra and the Goods were accompanied by necessary documents and the only mistake was the entry of the wrong vehicle number in the e-way bill. Further, there was no intention to evade taxes.
The Respondent contended that a minor mistake in entering details of the vehicle in the e-way bill can be ignored, but where the entire digit as has been entered in the e-way bill is not matching with the vehicle in transit, thus, the explanation afforded by the Petitioner cannot be accepted.
Whether the wrong mention of vehicle number through which the Goods were in transit would be considered as a human error?
The Hon’ble Allahabad High Court in Writ Tax No. – 958 of 2019 held as under:
Section 129 of the CGST Act:
“Detention, seizure and release of goods and conveyances in transit –
(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,––
(a) on payment of penalty equal to two hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty;
(b) on payment of penalty equal to fifty per cent. of the value of the goods or two hundred per cent. of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such penalty;
(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed:
Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.
(3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1).
(4) No penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard.
(5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded.
(6) Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under sub-section (1) within fifteen days from the date of receipt of the copy of the order passed under sub-section (3), the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise, in such manner and within such time as may be prescribed, to recover the penalty payable under sub-section (3):
Provided that the conveyance shall be released on payment by the transporter of penalty under sub-section (3) or one lakh rupees, whichever is less:
Provided further that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of fifteen days may be reduced by the proper officer.”
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
Heard Sri Shubham Agrwal, learned counsel for the petitioner and Sri R.S. Pandey, learned Standing Counsel for the State.
This writ petition has been filed assailing the penalty order dated 12.06.2018 passed by respondent no. 2 and the order dated 01.07.2019 passed by appellate authority, respondent no. 3.
The petitioner before this Court is a registered dealer under the Goods and Service Tax Act, 2017 (hereinafter called as “Act of 2017”). It is engaged in the business of manufacturing and sale of aerated water, fruit juice based drinks etc. The dealer was making a stock transfer from its unit at Gautam Buddha Nagar, Greater NOIDA depot to a sale depot at Kuberpur, Agra. The goods were being shifted through Truck No. HR-73/6755 which was accompanying delivery challan, e-way bill and bilty on 10.06.2018. The mobile squad on 10.06.2018 intercepted the goods and detained the vehicle in question along with the goods on the premise that in the e-way bill the vehicle number has been mentioned as UP-13T/6755. Detention order was passed on 11.06.2018. Thereafter, a penalty order under Section 129(3) of the Act of 2017 was passed imposing a tax of Rs.1,86,834/-and penalty of the same amount, totaling Rs.3,73,668. Against the said order, an appeal under Section 107 of the Act was preferred by the dealer before the Additional Commissioner, Grade-II (Appeal-III) Commercial Tax, Agra. The appeal was dismissed vide order impugned dated 01.07.2019. Hence, the present writ petition.
Sri Shubham Agrawal, learned counsel for the petitioner submitted that it was a case of stock transfer by the dealer from its unit at Gautam Buddha Nagar to sale depot at Agra. The goods which were in transit were accompanied by necessary documents and the e-way bill. The only mistake on the part of the person in-charge who had downloaded the e-way bill was wrong entry of the Vehicle No. UP-13T in place of HR-73. Except this fact the goods were being transported along with all the necessary documents. According to learned counsel, there was no intention to evade the tax on behalf of dealer and reliance has been placed upon decision of the Apex Court in case of Assistant Commissioner (ST) and others vs. M/s. Satyam Shivam Papers Pvt. Ltd. and another, 2022 UPTC (110) 269. The said judgment has been relied upon by Division Bench of this Court in case of M/s. Gobind Tobacco Manufacturing Corporation and another vs. State of U.P. and others, 2022 UPTC (111) 1080. Reliance has also been placed upon another Division Bench judgment of this Court in case of M/s. Ramdev Trading Company and another vs. State of U.P. and others, 2017 UPTC 1200.
Per contra, learned Standing Counsel submitted that the circular of the year 2018 issued by the Commissioner provides that in case of any mistake in entering details of the transporter in the e-way bill, one or two digit can be ignored by the taxing authorities, but where the entire digit as has been entered in the e-way bill is not matching with the vehicle in transit, the explanation afforded by the dealer cannot be accepted. He further contends that the registration number of vehicle through which the goods were in transit was HR-73/6755, while the number entered in the e-way bill was UP-13T/6755.
I have heard respective counsel for the parties and perused the material on record.
The sole controversy engaging the attention of the Court is as to whether the wrong mention of number of Vehicle No. HR-73/6755 through which the goods were in transit and detained by the taxing authorities would be considered as a human error and will be covered under the circular No. 41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018, as the number mentioned in the e-way bill was UP-13T/6755 and the mistake is of only of HR-73 in place of U.P.-13T.
It is not in dispute that goods were being transported by the dealer through stock transfer from its unit at Gautam Buddha Nagar to its sale depot at Agra. The bilty which is the document of the transporter mentions the vehicle number as HR-73/6755. From perusal of the e-way bill which has been brought on record, it is clear that the vehicle number has been mentioned as UP-13T/6755. It is apparently clear that mistake is as far as the registration of the vehicle in a particular State and in place of HR-73, UP-13T has been mentioned in the e-way bill, while number of the vehicle 6755 is same.
As there is no dispute to the fact that it is a case of stock transfer and there is no intention on the part of dealer to evade any tax, the minor discrepancy as to the registration of vehicle in State in the e-way bill would not attract proceedings for penalty under Section 129 and the order passed by the detaining authority as well as first appellate authority cannot be sustained. Moreover, the Department has not placed before the Court any other material so as to bring on record that there was any intention on the part of the dealer to evade tax except the wrong mention of part of registration number of the vehicle in the e-way bill. The vehicle through which the goods were transported and the bilty showed the one and the same number while only there is a minor discrepancy in Part-B of the e-way bill where the description of the vehicle is entered by the dealer.
In view of said fact, the orders dated 12.06.2018 and 01.07.2019 are unsustainable in the eyes of law and both the orders are hereby set aside.
Writ petition succeeds and is hereby allowed.
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