The Uttarakhand High Court has stated that a minor mistake in an e-way bill should not result in a penalty under tax laws if there was no intention to evade tax. The Court set aside a penalty of Rs. 10.67 lakh imposed on a taxpayer and directed the authorities to refund the deposited amount after deducting the nominal penalty prescribed under the CBIC Circular dated September 14, 2018.
The case has emerged after the State Tax Department seized a vehicle transporting aluminium roofing sheets. At the time of verification, the officials discovered a mismatch between the GST e-way bill details cited in the tax invoices and the e-way bills carried by the driver.
The discrepancy was confined to the invoice numbers being recorded as “32” and “33” instead of “32/(23-24)” and “33/(23-24).” As per the mismatch, the department levied a penalty u/s 129 of the GST law.
The applicant claimed that the mismatch was a genuine human error and placed reliance on the CBIC circular dated September 14, 2018, which states that minor clerical or typographical mistakes in GST documents must draw merely a nominal tax penalty under section 125 and not the detention penalty u/s 129. The applicant mentioned the previous decision of the High Court in M/s Sonal Automation Industries vs. State of Uttarakhand, where similar relief had been given.
The HC analysed the records and said that the department was unable to prove any intent to evade tax or any financial advantage emerging from the error. It was observed that the revenue considered the goods matched the declarations in the e-way bill and accompanying documents. Because of an inadvertent discrepancy, the Court held that invoking Section 129 was not justified.
Subsequently, the HC set aside the penalty order, authorised the writ petition, and asked the authorities to refund the amount deposited by the applicant, after deducting the nominal penalty applicable under Clause 5 of the CBIC Circular dated September 14, 2018.
| Case Title | Kamlesh Kumar vs State Tax Officer |
| Case No. | WRIT PETITION (M/S) NO. 3268 OF 2023 |
| For Petitioner | Mr. Rohit Arora |
| For Respondent | Ms. Puja Banga |
| Uttarakhand High Court | Read Order |
