Kamlesh Kumar vs. State Tax Officer

Held

The Court held that the invocation of Section 129 of the CGST/SGST Act, 2017, was not justified. The Court found that the discrepancy in the e-way bill numbers on the tax invoices, as '32' and '33' instead of '32/(23-24)' and '33/(23-24)', was a case of human error. The Court noted that the Revenue could not point out any benefit accrued to the petitioner or any tax avoidance as a result of this mistake. Furthermore, the Department admitted in its counter-affidavit that the goods found were as per the declaration in the e-way bill and the accompanying documents. Relying on the circular dated 14th September, 2018, and the precedent set in "M/s Sonal Automation Industries vs. State of Uttarakhand & others", the Court reasoned that such minor discrepancies, without any intention to deceive and without affecting financial implications or tax liabilities, should be overlooked. The impugned order imposing penalty under Section 129 was quashed. The Court directed the refund of the amount deposited by the petitioner after deducting the penalty as per clause 5 of the circular dated 14th September, 2018.

Facts

The petitioner, Kamlesh Kumar, filed a writ petition challenging an order dated 10.09.2023, passed by the State Tax Officer, imposing a penalty of Rs.10,67,450/- under Section 129 of the CGST/SGST Act, 2017, read with Section 20 of the IGST Act, 2017. The penalty was levied after the interception of a vehicle carrying aluminum roofing sheets on 09.09.2023. The Department's case was that there was a mismatch between the e-way bill numbers mentioned on the tax invoices and the e-way bills produced by the driver. Specifically, the invoices referred to e-way bill numbers as '32' and '33', whereas the actual e-way bills were numbered '32/(23-24)' and '33/(23-24)'. The petitioner contended this was a human error.

Key Issues

1. Whether the invocation of Section 129 of the CGST/SGST Act, 2017, was justified in a case of a typographical error in the e-way bill number mentioned on the tax invoice, where the goods matched the e-way bill declaration and no tax benefit was accrued to the petitioner? The petitioner argued that the discrepancy was a mere human error and not an intentional act to evade tax. They relied on a circular dated 14th September, 2018, issued by the Central Board of Indirect Taxes and Customs, which clarified that in cases of inadvertent mistakes and typographical errors, a nominal penalty of Rs.500/- under Section 125 of the CGST Act and respective SGST Act should be imposed, and Section 129 should not be invoked. The petitioner also cited a previous judgment of the Uttarakhand High Court in "M/s Sonal Automation Industries vs. State of Uttarakhand & others" (Writ Petition (M/S) No.1969 of 2021), which followed the same circular and held that Section 129 was not applicable for similar e-way bill number mismatches. The respondent (State Tax Officer) did not record any specific arguments against the petitioner's contentions in the judgment.