Penalty u/s 129 cannot be imposed for minor typographical error in the e-way bill, where there is no intent to evade tax

Facts of the Case:- In this case, the petitioner was supplying cosmetics to another registered dealer in Jharkhand when goods were intercepted. It was contended that the transaction was duly covered by tax invoice, bilty and e-way bill. A seizure order was passed because the vehicle number in Part B of the e-way bill was incorrect as the e-way bill showed the vehicle bearing No.DL1 AA 3552 instead of DL1 AA 5332. The penalty was also imposed on the sole ground that the vehicle number was not correctly mentioned.

Submission of the Petitioner: – The Petitioner contended that that there was no allegation as to intention to evade tax on the part of the petitioner-assessee as the e-way bill, bility and the tax invoice were matching and the consignee was also a registered dealer. It was contended that there was a typographical error in the e-way bill regarding the vehicle number and the same mistake was also pointed out in the impugned order. Reliance were placed upon judgment of Allahabad High Court in the case of M/s. Varun Beverages Limited v. State of U.P. and 2 others and Supreme Court in the case of Assistant Commissioner (ST) and others v. M/s. Satyam Shivam Papers Pvt. Ltd. And another, wherein it was held that “Upon perusal of the judgments, the principle that emerges is that the 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 the imposition of penalty.”

Held:- The High Court held that intention to evade tax is a sine qua non for imposition of penalty. The Court held that a penalty cannot be imposed based solely on a typographical error in the e-way bill without any further material establishing an intention to evade tax.

Further, 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. The Petition is accordingly allowed. 

To read the complete judgment 2024 Taxo.online 8