Whether detention of vehicle and goods under GST is justified for small clerical mistakes in e-way bill? 

High Court allowed the writ application and ordered for release of vehicle and goods.

Facts:

Applicant is a Public Limited Company and manufacturer of uPVC Windows & Doors etc. all wood-substitute products. 

On 11.04.2022, applicant has supplied goods from Jaipur unit to Bhavnagar (Gujarat) buyer vide invoice no. SP-22-23/0021 for total Rs.12,19,889/- after charging IGST @18% of Rs. 1,86,084.78 and goods were moved through truck no. RJ14GJ0853 with all valid documents i.e. Invoice, LR and e-Way Bill No. 7812-5241-2727, which was generated through official GST Website at the time of removal of goods from the factory premises.

Thereafter, early morning, GST office has withhold the goods and vehicle on the Amirgadh checkpost for the purpose of physical verification/inspection of the goods, without assigning any specific reason and after receiving the information for the same from the driver.

Applicant has immediately sent his Ahmedabad Branch Manager to the checkpost to get the physical verification of the goods conducted but GST Officer issued the order/notice under section 129(1) for the detention of the goods and vehicle and have assigned the reason: WRONG VEHICLE TYPE (ODC).

Petitioner Arguments:

It is submitted that goods were moved with all the proper documents including e-Way bill, generated from the GST Portal. Their was no Tax Evasion or Intent to evade Tax by any means. You have not found any discrepancy after physical verification of goods and conveyance but have detained the goods & vehicle stating the reason: WRONG VEHICLE TYPE (ODC).

Sir, goods were moved through truck and correct number of truck as well as LR is also filled in the e-1 Way Bill. Selection of the ODC vehicle type while generating e-Way Bill is just a clerical/technical error and it doesn't results any tax evasion by us. There is no provision to levy penalty/tax under Section 129(1) for such clerical errors as there is no evasion of the tax in any manner. Goods were supported with proper documents and e-Way Bill and no discrepancies were noticed during physical verification.

High Court:

he short point for our consideration is whether, in fact, it was a bona fide mistake on the part of the writ applicant, or whether it was a mischievous act with a view to derive some illegal benefit, as asserted by Mr. Sharma, the learned A.G.P. We take notice of the fact that the goods were in transit with all the necessary documents including the E-way bill generated from the GST portal. The goods were moved through a truck whose registration number was also correct. The LR was also filled in the E-way bill.

Keeping the aforesaid in mind, we should look into the circular issued by the Government of India, Central Board of Indirect Taxes and Customs dated 14th September 2018. Para 5 of the same reads thus:

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 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.

The circular makes it clear that in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, the proceedings under Section 129 of the CGST Act may not be ordinarily initiated, more particularly, in the situation, as highlighted in para 5 of the circular.

We are of the view that the goods of the writ applicant fall within Clause 5 of the circular referred to above. The manner in which the writ applicant has proceeded so far and also having regard to the fact that very promptly he brought to the notice of the authority concerned and admitted its mistake, we would like to give the writ applicant some benefit of doubt.

In view of the aforesaid, this writ application succeeds and is hereby allowed. 

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