Negligible mismatch in the quantity does not amount to detention under section 129 of the CGST Act, 2017
Facts: In this case, the petitioner is engaged in the business of copper wires and copper scraps. The aforesaid goods were intercepted by the respondents at Manesar and on being asked all relevant documents including valid invoice and e-way bill were produced by the petitioner before the authorities/respondents. However, the respondents issued FORM GST MOV -02 and ordered to station the vehicle. The petitioner duly filed a reply to the aforesaid FORM GST MOV – 02 ,considering the same the respondents on the same day issued detention order under Section 12(1) in FORM GST MOV – 06 and later on GST FORM MOV 07 was also issued to the petitioner. Hence the present writ has been filed. The respondent submitted that on physical verification there was a discrepancy in the actual quantity and the quantity shown in the invoice and e-way bill, thus there was an intention to evade tax on part of the petitioner.
Held: The Hon’ble High Court after considering the submissions from the both sides observed that from the perusal of e-invoice it is clear that the quantity of consigned goods has been shown as 10,430.7 kilograms instead of 10,520 kilograms and the said difference in weight is less than 1%. Moreover, an amount of Rs.12,76,717.68/- has been paid as tax on the consignment by the petitioner. On the basis of this observation, the Hon’ble Court held that there is no intent to evade tax as the mismatch in the quantities is of such a nature which shall not amount to proceedings under Section 129 of the Act. It was further held that a person who has already paid a tax of Rs. 12,76,717.68/- on a consignment cannot be said to have intent to evade tax amounting to Rs. 11,000 as alleged by the authorities. Thus, the mismatch cannot be termed as contravention of provisions of the Act.
The Hon’ble High Court with the above findings allowed the writ petition and quashed the proceedings against the petitioner under Section 129 of the Act, directing the respondents, as the goods already are released, to refund the amount of fine and penalty, if any, deposited by the petitioner within 15 days of the receipt of the order.