M/S Varun Beverages Limited vs. State Of U.P. And 2 Others

Held

The Court held that the sole controversy was whether the wrong mention of the vehicle number in the e-way bill constituted a human error covered by Circulars No. 41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018. It was undisputed that the goods were being transported as stock transfer, and the bilty confirmed the vehicle number as HR-73/6755. The e-way bill erroneously mentioned UP-13T/6755, with the only discrepancy being the state of registration ('HR-73' vs. 'UP-13T'), while the vehicle chassis number '6755' remained the same. The Court found no intention on the part of the dealer to evade tax. Therefore, the minor discrepancy in the vehicle's state of registration in the e-way bill did not warrant proceedings for penalty under Section 129. The orders passed by the detaining authority and the first appellate authority were deemed unsustainable. The Court set aside both orders dated 12.06.2018 and 01.07.2019. The ratio decidendi is that a minor, unintentional error in the vehicle registration details on an e-way bill, especially when other supporting documents are in order and there is no intent to evade tax, should not attract penalty under Section 129.

Facts

M/s. Varun Beverages Limited, a registered dealer, was transporting goods via stock transfer from its Gautam Buddha Nagar unit to its Agra depot using Truck No. HR-73/6755. The vehicle was intercepted on 10.06.2018, accompanied by a delivery challan, e-way bill, and bilty. The mobile squad detained the vehicle and goods, citing a discrepancy in the e-way bill where the vehicle number was recorded as UP-13T/6755 instead of HR-73/6755. A detention order was issued on 11.06.2018, followed by a penalty order under Section 129(3) of the GST Act, imposing a tax of Rs. 1,86,834/- and an equal penalty, totaling Rs. 3,73,668. The petitioner's appeal before the appellate authority was dismissed on 01.07.2019. This writ petition challenges these orders.

Key Issues

1. Whether the incorrect mention of the vehicle registration number in the e-way bill, specifically 'UP-13T' instead of 'HR-73', constitutes a human error covered by the circulars issued by the Commissioner, thereby vitiating the penalty imposed under Section 129(3) of the GST Act? Petitioner's Arguments: The petitioner contended that the goods were being transported via stock transfer with all necessary documents, including the e-way bill. The discrepancy in the vehicle number was a mere human error by the person in charge who downloaded the e-way bill, with no intention to evade tax. They relied on Supreme Court's decision in Assistant Commissioner (ST) vs. M/s. Satyam Shivam Papers Pvt. Ltd. and Division Bench judgments of this Court in M/s. Gobind Tobacco Manufacturing Corporation vs. State of U.P. and M/s. Ramdev Trading Company vs. State of U.P. Respondent's Arguments: The Standing Counsel argued that a circular from 2018 allows minor discrepancies in transporter details, but a complete mismatch in digits, as seen in this case where 'HR-73' was replaced by 'UP-13T', renders the dealer's explanation unacceptable. The registration number of the vehicle in transit did not match the one entered in the e-way bill.