In a recent legal battle under GST, Hindustan Herbal Cosmetics a registered cosmetics dealer found themselves entangled in a dispute over a typographical error in the e-way bill. The petitioner, engaged in the legitimate supply of cosmetics to another registered dealer, M/s Shree Sai Infotech in Jharkhand, faced a significant setback when authorities intercepted their goods in transit. The crux of the matter revolved around a discrepancy in the vehicle number mentioned in the e-way bill.
The petitioner, operating lawfully under the GST Act, meticulously documented the transaction with a tax invoice, bilty, and e-way bill, all dated May 23, 2018. However, the authorities raised concerns over the inconsistency between the vehicle number in the e-way bill (DL1 AA 3552) and the actual vehicle number (DL1 AA 5332). Despite the absence of any other infractions, penalties were imposed solely based on the discrepancy in the vehicle number.
The petitioner argued that the error was a typographical one, emphasizing that the e-way bill, bilty, and tax invoice aligned accurately. The legal analysis delves into precedent-setting judgments, notably M/s. Varun Beverages Limited and M/s. Satyam Shivam Papers, shedding light on the pivotal concept of mens rea – the intent to evade tax.
In the Varun Beverages case, a similar typographical error (HR-73 instead of UP-13T) did not attract penalties due to the absence of any intent to evade tax during a stock transfer. Similarly, the Satyam Shivam Papers case emphasized that the imposition of penalties requires proof of intent, which was lacking in instances beyond the dealer's control.
The legal analysis concludes that the typographical error in the present case, involving a difference of three digits in the vehicle number, falls within the realm of minor discrepancies. Drawing parallels with precedent, it argues that imposition of penalties under Section 129 of the Act, without establishing mens rea, is unjust and illegal. The court quashes the impugned orders dated 29.8.2019 and 24.5.2018, providing the petitioner with consequential relief within the next four weeks.
In essence, the judgment underscores the need for an equitable application of the law, particularly in cases where typographical errors do not indicate an intent to evade tax. The decision sets a precedent for future cases involving similar discrepancies in the GST framework.