Case Law Details
Ridhi Sidhi Granite And Tiles Vs State of UP And 2 Others (Allahabad High Court)
The case at hand revolves around a writ petition filed under Article 226 of the Indian Constitution, challenging an order passed by the Additional Commissioner, Grade-2 (Appeal)-I, State Goods and Services Tax, NOIDA. The petitioner contested an order dismissing their appeal, citing an error in the E-Way Bill address as the sole issue leading to tax imposition.
Upon thorough examination of the records, it becomes evident that the imposition of tax was solely predicated on a technical error in the E-Way Bill address. The invoice details were accurate, the goods matched the description, and no evidence of tax evasion or mens rea was presented by the authorities.
Legal precedent plays a pivotal role in such cases. As highlighted in various judgments, including M/s Modern Traders v. State of U.P. and others, M/s Galaxy Enterprises v. State of U.P. and others, and Hindustan Herbal Cosmetics v. State of U.P. and others, the presence of mens rea is deemed essential for the imposition of penalties related to tax evasion. Mere technical errors, without evidence of intent to evade taxes, do not warrant penalty imposition.
In light of the legal principles established by previous judgments and the lack of evidence indicating intentional tax evasion, the orders dated September 23, 2023, and April 10, 2021, are deemed unjust. Consequently, the writ petition stands allowed, and the petitioner is entitled to the refund of the deposited amount. This case underscores the significance of mens rea in tax enforcement, ensuring fair treatment and adherence to legal standards in matters of taxation.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Rishi Raj Kapoor, learned counsel for the petitioner and the learned Additional Chief Standing Counsel appearing on behalf of the State.
2. This is a writ petition under Article 226 of the Constitution of India, wherein the petitioner is aggrieved by the order dated September 23, 2023 passed by the Additional Commissioner, Grade-2 (Appeal)-I, State Goods and Services Tax, NOIDA dismissing the appeal filed by the petitioner and the order in original dated April 10, 2021.
3. Upon perusal of the record, it appears that apart from an error with regard to the address of the consignee in the E-Way Bill, there were no other issues with the said consignment. The invoice contained the address, the goods matched the description in the invoice and all other materials were intact. The imposition of tax is only on the basis of a technical error with regard to address of the consignee that was wrongly written in the E-Way Bill. The authorities have not been able to indicate any mens rea on the part of the petitioner for evasion of tax.
4. In a catena of judgments, this Court has held that presence of mens rea for evasion of tax is a sine qua non for imposition of penalty and mere technical error would not lead to imposition of penalty [see M/s Modern Traders v. State of U.P. and others (Writ Tax No.763 of 2018, decided on 9.5.2018), M/s Galaxy Enterprises v. State of U.P. and others (Writ Tax No.1412 of 2022, decided on 6.11.2023 and Hindustan Herbal Cosmetics v. State of U.P. and others (Writ Tax No.1400 of 2019, decided on 2.1.2024].
5. In light of the above, the orders dated September 23, 2023 and April 10, 2021 are quashed and set aside. The amount deposited by the petitioner be refunded to it within a period of one month from date. Other consequential reliefs to follow.
6. The writ petition is, accordingly, allowed.
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