Proceedings u/s 129 leading penalty order not sustainable, where e-way bill incorrectly mentions ‘Place of Delivery’ due to a human error 

The Allahabad High Court noted that the discrepancy in the e-way bill could indeed be attributed to human error. Importantly, the Court observed that neither the authorities nor the State provided evidence of “mens rea” or intent to evade tax by the petitioner. The Court referenced its previous judgment in Nancy Trading Company v. State of U.P., which held that in the absence of a finding of “mens rea,” proceedings under Section 129(3) of the Act should not have been initiated. The Court ruled that impugned order and penalty proceedings were unsustainable in law due to the lack of evidence of intent to evade tax.

In this case, the petitioner filed writ Petition to challenge impugned order and penalty proceedings u/s 129 of the Act. The Petitioner supplied goods, however, the e-way bill incorrectly listed “Chandpur (UP)” instead of ‘Aligarh’ as the place of delivery due to a human error. Thereafter, the goods were detained during transit for this discrepancy. Following the detention, proceedings under Section 129 of the UPGST Act were initiated, leading to a penalty order. It was argued that discrepancy was a human error with no intent to evade tax, as all required documents were in order except for the delivery address. Also, authorities did not establish “mens rea” (intent to commit a wrongdoing), which is essential for imposing a penalty under Section 129(3) of the GST Act.

To read the complete judgment 2024 taxo.online 1599