1. ABC Enterprises, a Mumbai-based supplier of electronic goods, dispatched a consignment to XYZ Retailers in Bangalore on June 1, 2024. The shipment included laptops, mobile phones, and accessories with an invoice value of ₹5,00,000 (Invoice No.: INV123456). FastTrack Logistics was responsible for transporting the goods, and an E-way Bill (No.: EWB567890) was generated as per GST regulations, valid from June 1 to June 7, 2024. However, an error occurred during the E-way Bill generation, where the invoice number was incorrectly entered as INV123654 instead of INV123456. This discrepancy was discovered on June 3, 2024, during a routine check by GST officers at a checkpoint in Pune.
2. ABC Pvt. Ltd was served a notice for the discrepancy between the invoice number mentioned in the physical invoice (INV123456) and the invoice number mentioned in the E-way Bill (INV123654).
NOTICEE’S SUBMISSIONS
Noticee has to give the sufficient proof before the Department that this error has been committed due to clerical error and without having any malafide intention to evade tax.
1. That the department while issuing the impugned SCN dated XX December 2023 held that there is a difference between the invoice number mentioned in the physical invoice (INV123456) and the invoice number mentioned in the E-way Bill (INV123654) , leading to penalty of Rs. XXX/-
2. In this regard, it is submitted that, this error has been committed due to clerical error and without having any malafide intention to evade tax and in such case , levy of penalty is unlawful and unjust.
3. Further, a Circular has been issued by the Board vide Circular 64/38/2018-GST dated 14 September 2018, wherein Board itself has accepted that during the transit of goods, if authorities found any of the mistakes mentioned in the Circular, then in that case, proceedings under Section 129 cannot be initiated and levy of such hefty penalty is totally unjustified and unwarranted. The relevant extracts of the Circular dated 14 September 2018 is reproduced below for ease of reference:
“5. Further, in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under section 129 of the CGST Act may not be initiated, inter alia, in the following situations:
a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, wherever applicable, is correct;
b) Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill;
c) Error in the address of the consignee to the extent that the locality and other details of the consignee are correct;
d) Error in one or two digits of the document number mentioned in the e-way bill;
e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct;
f) Error in one or two digits/characters of the vehicle number.
6. In case of the above situations, penalty to the tune of Rs. 500/- each under section 125 of the CGST Act and the respective State GST Act should be imposed (Rs.1000/- under the IGST Act) in FORM GST DRC-07 for every consignment. A record of all such consignments where proceedings under section 129 of the CGST Act have not been invoked in view of the situations listed in paragraph 5 above shall be sent by the proper officer to his controlling officer on a weekly basis.”
4. Further, reliance is placed upon the catena of judgments, passed by the Hon’ble High Courts, wherein clerical error committed in the E-way by the assessee is condoned:
i. In the case of Rai Prexim India (P.) Ltd. Vs. State of Kerala reported at 2018 Taxo.online 512 (Kerala), competent authority had detained the goods and vehicle of the assessee on plea that in original E-way Bill place of delivery was not correctly shown and in revised E-way bill value of goods was not correctly shown, Hon’ble Court held that:
“2. If a human error which can be seen on naked eye is detected, such human error cannot be capitalised for penalisation. Normally, this Court could not have persuaded to accept the contention on prima facie value as it is a matter for decision by competent authority and this Court can only order release of the vehicle and goods as against Bank guarantee. But I am persuaded to adopt a different course for the simple reason that if the petitioner had paid the IGST in accordance with the value as shown in the original bill, goods cannot be detained and shall be released to the petitioner. Therefore, the following orders are issued.”
[Emphasis Supplied]
ii. In the case of M/s SATGURU IMPEX Vs. State of Tripura reported at 2022 Taxo.online 542 (Tripura), Hon’ble Court held that goods and vehicle were to be released once mistake in defective E-way bill was rectified by generating new E-way bill, the relevant paragraphs are extracted below for ease of reference:
“6. Upon hearing the learned counsel for the respective parties, we are of the considered view that while there appeared to be an apparent mistake in the original E-way bill under Annexure-1, i.e. the name of the seller and the buyer had been erroneously swapped and, therefore, the Revenue was justified in not allowing the vehicle to enter into the State and seized the same, yet we find that once the corrected E-way bill under Annexure-3 was produced before the respondents and the apparent error having been corrected, there is no justification in either initiating the present proceedings against the petitioner or in continuing with the seizure of the vehicle along with goods.
7. The aforesaid view expressed by us is founded on the belief that the role of the State Revenue authorities is highly essential and imperative for the economic growth of the State. In the case at hand, there is no dispute that the parties are genuine, nor is there any dispute that the original E-way bill contained an error. However, where the error is rectified and a corrected E-way bill is produced, it would be appropriate for the Revenue authorities to act sensibly in the manner and proceed. Causing unnecessary impediment to the free flow of goods and vehicles does cause an unnecessary hindrance to the economy of the State. It may be also stated that wherever cases are found where people are using fake E-way bills and/or trying to evade that taxation, adequate power is vested in the Revenue to take suitable action in such matters. But in the present case, the said situation does not arise.”
[Emphasis Supplied]
iii. In the case of M/s SONAL AUTOMATION INDUSTRIES Vs. State of Uttarakhand, reported at 2022 Taxo.online 461 (Uttarakhand), where penalty under section 129 on detention of vehicle and goods were not to be invoked for inadvertent/human errors at time of furnishing details in e-way bill. The relevant paragraph of the judgment is reproduced below for ease of reference:
“8. This Court is of the view, that the implications of clause 5 of the Circular, has to be rationally and logically construed and when the revenue was conscious, that a minor error may creep in while furnishing the e-way bill and those minor discrepancies are to be overlooked and Section 129, is not to be even invoked invariably, under all the circumstances, where it does not affect the financial implications or the liabilities, which has to be fastened upon the assessee under the Taxing Laws.
The Sub-clauses referred therein to clause 5, has to be rationally construed and once the exception of mistake is considered to be excused under clause 5 of the Circular of 14th September, 2018, and looking to the nature of the error, which has crept in, in the instant case, I am of the view, that since it was not backed with a clever intent to deceive the State of the revenue, and particularly, when the other figures or entries provided by the petitioner by submission of the e-way bill to the respondents/revenue, it contained all the other particulars, which were correct and corresponding to the details provided in the tax invoice, in fact, there was no apparent intention, as such to deceive the State with the revenue and hence, the error which has crept in giving the invoice number would fall to be within an exception clause 5 of the Circular of 14th September, 2018.”
[Emphasis Supplied]
iv. In the case of Sanskruthi Motors Vs. The Joint Commissioner (Appeals) II State Goods & Service Tax Department, reported at 2022 Taxo.online 840 – Kerala High Court, wherein the Hon’ble Court held that:
“9. A reading of the above statutory Circular reveals that the purpose of issuing such a Circular was to mitigate the hardships being caused to taxpayers for minor discrepancies, which had no bearing on the liability to tax or on the nature of goods being transported. The circular is statutory in nature and is binding on the Tax Officers. Thus minor discrepancies cannot be penalized contrary to the mode and procedure contemplated under the Circular.
10. However, the Circular refers to only six instances of minor discrepancies. Strictly speaking, the present situation is not covered by the six instances mentioned in the Circular. However, the analysis of the six instances reveals those discrepancies which have no bearing on tax liability and are caused on account of bonafide mistakes like typographical errors, or otherwise are regarded as minor discrepancies. In fact, the situation in the present case can be even brought under the broader umbrage of clause (d) of para 5 of the Circular.
11. In the instant case, the discrepancy pointed out is only on the date of invoice which is shown as 03.02.2021 while that shown in the e-way bill was 02.03.2021. All other details in the invoice and the e-way bill including the nature of goods transported, the details of consignor and consignee, the GSTIN of supplier and recipient, place of delivery, invoice number, value of goods, HSN code, vehicle number etc. tallied and had no discrepancy. Thus the error noticed is insignificant and not of any consequence for invoking the power conferred under section 129 of the Act to impose tax and penalty.”
[Emphasis Supplied]
Burden of proof lies on the Department to prove that multiple movement of goods have been made using the same invoice by generating duplicate E-way Bills
5. Further, it is submitted that the Department’s main allegation while issuing the SCN is that Noticee has made multiple movement of goods.
6. In this regard, it is submitted that it is the duty of the Department to prove by positive evidence that E-way bill was being re-used. Further there is no material on record to demonstrate that goods were moved twice by the Noticee.
7. That the presumption could not be drawn on the basis of the mismatch in invoice dates though there did not exist evidence of actual transaction performed and though there is no statutory presumption
8. Reliance has been placed upon the following judgments wherein the Hon’ble Court held that the initial onus is on the assessing authority to lead positive evidence to establish that the goods had been transported twice:
i. M/s Anandeshwar Traders Vs. State of U.P and 2 others cited at2021 Taxo.online 77, wherein the Hon’ble Court held that:
“10. Even if the dealer does not cancel the e-way bill within 24 hours of its generation, it would remain a matter of inquiry to determine on evidence whether an actual transaction had taken place or not. That would be subject to evidence received by the authority. As such it was open to the seizing authority to make all fact inquiries and ascertain on that basis whether the goods had or had not been transported pursuant to the e-way bills generated on 24.11.2019. Since the petitioner-assessee had pleaded a negative fact, the initial onus was on the assessing authority to lead positive evidence to establish that the goods had been transported on an earlier occasion. Neither any inquiry appears to have been made at that stage from the purchasing dealer or any toll plaza or other source, nor the petitioner was confronted with any adverse material as may have shifted the onus on the assessee to establish non-transportation of goods on an earlier occasion.
11. The presumption could not be drawn on the basis of the existence of the e-way bills though there did not exist evidence of actual transaction performed and though there is no statutory presumption available. Also, there is no finding of the assessing authority to that effect only. Mere assertion made at the end of the seizure order that it was clearly established that the assessee had made double use of the e-way bills is merely a conclusion drawn bereft of material on record. It is the reason based on facts and evidence found by the assessing authority that has to be examined to test the correctness of the order and not the conclusions, recorded without any material on record.”
[Emphasis Supplied]
ii. M/s S.R. Sales Vs. State of U.P., cited in 2023 Taxo.online 140, wherein the Hon’ble Court held that:
“8. There is no material on record to demonstrate that goods were brought twice by the petitioner. The petitioner had brought on record the e-way bill through annexure no. 2 to writ petition which demonstrates that cosigner has sent the goods through the transporter and e way bill was generated on 10-10-2018 which clearly reflects that goods originated from Birur and the transporter changed the truck at Amrawati and thereafter at Nagpur. The truck in question which was detained at Lakhanpur, Kanpur on 22-10-2018 through which goods were being carried being U.P.-78CN/4605 accompanying e-way bill no. 161073493422, the presumption drawn by both the authorities cannot be accepted without there being any material on record that earlier the petitioner had brought the goods from Nagpur through Truck No. U.P.-78DT/6036.
9. Further, I find that the argument raised by learned Standing Counsel cannot be accepted which is based on presumption and without any valid material on record. From perusal of the order impugned, I find that the proceedings has been initiated solely on the basis of presumption that goods having been brought into the State using two different vehicles by same e-way bill. Once, it was found that the vehicle was carrying the required documents along with the e-way bill, no question arose for taking some other view.”
[Emphasis Supplied]
Conclusion
9. Therefore, on perusal of the judgments & submissions made supra, it is clear that the penalty cannot be imposed on the Noticee for the mis-match in invoice no as it is a clerical error and hence, the same cannot be sustained.
