Case Law Details
Sangeeta Jain Vs Union of India and 3 Others (Allahabad High Court)
It held: (i) the goods mentioned in the invoice and e-way bill matched; in terms of quantity and value; the non-mention of dispatch address is a minor breach not inviting provisions of section 129
The petitioner is a dealer registered in Maharashtra. It sold goods to a purchaser in Telangana. It sold goods from Delhi depot. The goods were intercepted, during transit, in Uttar Pradesh. An order came to be passed imposing penalty under section 129 of the CGST Act on the ground that the dispatch address of the goods is not mentioned in the invoice. An appeal was filed, but with no success. As there is no GST Tribunal, hence, writ petition was filed.
The Hon’ble Allahabad High Court allowed the writ petition and set aside the orders. It held: (i) the goods mentioned in the invoice and e-way bill matched; in terms of quantity and value; the non-mention of dispatch address is a minor breach not inviting provisions of section 129; (ii) _mens rea_ is a sine qua non for imposition of penalty under section 129; (iii) follows judgment in the case in Hindustan Herbal Cosmetics; (iv) directs department to refund tax and penalties in 2 weeks to the petitioner.
The matter was argued by Ld. Counsel Bharat Raichandani
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard counsel appearing on behalf of the parties.
2. This is a writ petition under Article 226 of the Constitution of India, wherein the petitioner is aggrieved by the order dated December 12, 2022 passed by the respondent No.3/Additional Commissioner, Grade-2 (Appeal)-I, State Tax, Agra and the order dated March 13, 2021 passed by the respondent No.4/Assistant Commissioner, Mobile Squad-I, Agra.
3. Contention of the petitioner is that the only ground on the basis of which the penalty under Section 129(3) of the Central Goods and Service Tax Act, 2017 (hereinafter referred to as ‘the Act’) is that the dispatch address mentioned in the e-way bill. It is to be noted that the goods in the truck matched with the invoice and the e-way bill and there is no other discrepancy. Furthermore, the impugned orders do not, in any manner, indicate any intention to evade tax. In fact, the original authority has stated in his order that mens rea is not required for imposition of penalty.
4. Per contra, counsel on behalf of the respondents submits that the proceedings initiated against the petitioner is in accordance with the rules and provisions provided under the statutory provision. The impugned proceedings were initiated after due adjudication of the facts and materials on record. Hence, the same are just and proper.
5. A perusal of the order imposing penalty indicates that the original authority has stated that mens rea is not required for imposition of penalty. This view is not correct in law and the conclusion reached thereafter is obviously illegal. This Court in M/s Hindustan Herbal Cosmetics v. State of U.P. and Others (Writ Tax No.1400 of 2019 decided on January 2, 2024) held that mens rea to evade tax is essential for imposition of penalty. The relevant paragraph of the said judgment reads as under:
“8. Upon perusal of the judgments, the principle that emerges is that presence of mens rea for evasion of tax is a sine qua non for imposition of penalty. A typographical error in the e-way bill without any further material to substantiate the intention to evade tax should not and cannot lead to imposition of penalty. In the case of M/s. Varun Beverages Limited (supra) there was a typographical error in the e-way bill of 4 letters (HR ? 73). In the present case, instead of ‘5332’, ‘3552’ was incorrectly entered into the e-way bill which clearly appears to be a typographical error. In certain cases where lapses by the dealers are major, it may be deemed that there is an intention to evade tax but not so in every case. Typically when the error is a minor error of the nature found in this particular case, I am of the view that imposition of penalty under Section 129 of the Act is without jurisdiction and illegal in law.”
6. In light of the above, I am of the view that the orders impugned in this writ petition cannot be sustained in the eyes of law. Accordingly, the orders dated December 12, 2022 and March 16, 2021 are quashed and set aside.
7. This Court directs the respondents to refund the amount of tax and penalty deposited by the petitioner within a period of four weeks from date.
8. The instant writ petition is allowed in the aforesaid terms
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