The presence of mens rea for evasion of tax is essential for the imposition of a penalty under Section 129 of the Goods and Service Tax Act.

JUDGMENT :

1. This is an application under Article 226 of the Constitution of India wherein the petitioner assails the order passed by the Additional Commissioner Grade-2 (Appeal), Commercial Tax, Ghaziabad/respondent No.3 dated August 29, 2019 and the order of the imposition of the penalty dated May 24, 2018 passed by the Assistant Commercial, Commercial Tax, Squad Unit-VI, Ghaziabad/ respondent No.2.

2. The case of the petitioner is that the petitioner is a duly registered dealer under the Goods and Service Tax Act, 2017 (hereinafter referred to as ‘the Act’) and is a seller of cosmetics. The petitioner was supplying cosmetics to another registered dealer, namely, M/s Shree Sai Infotech in Jharkhand and the transaction was duly covered by a tax invoice, a bilty and e-way bill, all dated May 23, 2018.

3. It is a contention of the petitioner that the consignment of goods was sent by the petitioner in Vehicle No.DL1 AA 5332. When the vehicle was in transit, the same was intercepted on 23.5.2018 10.40 P.M. by the Goods and Service Tax authorities. The seizure order was passed on the ground that the vehicle number in Part-B of the e-way bill was incorrect as the e-way bill showed the vehicle bearing No.DL1 AA 3552 instead of DL1 AA 5332. Apart from the above factual position, it is clear that there was no other infraction on the part of the petitioner. Furthermore, the authorities have imposed penalty only on the ground that the vehicle number was not mentioned correctly. There is no allegation of any attempt by the petitioner for evasion of tax as the e-way bill, bilty and the tax invoice were matching and the consignee was also a registered dealer.

4. Counsel on behalf of the petitioner has submitted that number 5332 was typed incorrectly as 3552. He has submitted that this is so obviously a typographical error and similar mistake has also been made in the impugned order that has been passed by the authority concerned. He further relies upon a coordinate Bench judgment of this Court in M/s. Varun Beverages Limited v. State of U.P. and 2 others reported in 2023 U.P.T.C. (113) 331 and also upon the judgment of the Supreme Court in Assistant Commissioner (ST) and others v. M/s. Satyam Shivam Papers Pvt. Ltd. And another reported in 2022 U.P.T.C. (110) 269 (SC).

5. Per contra, Mr. Ravi Shanker Pandey, learned Additional Chief Standing Counsel has submitted that the Department via a circular has allowed non imposition of penalty in cases where there are mistake of two digits in the vehicle number and no further. He has further submitted that the judgment in M/s. Varun Beverages Limited (supra) would not apply as the same was a case of stock transfer and there was no question of any tax liability in that case. He has also attempted to distinguish the Supreme Court judgment on the ground that it was a case wherein the e-way bill had expired just before the vehicle was detained and seized.

Analysis and Conclusion

6. In the present case, one finds that there is definitely an error with regard to typing of the vehicle number and there is a difference of three digits instead of the permitted two digits (as per the government circular) as submitted by the learned Additional Chief Standing Counsel. However, law is not to remain in a vacuum and has to be applied equitably in appropriate cases. The judgment in M/s. Varun Beverages Limited (supra) may be referred to for this purpose. The relevant paragraphs of the said judgment are delineated below:-

“7. The sole controversy engaging the attention of the Court is as to whether the wrong mention of number of Vehicle No. HR-73/6755 through which the goods were in transit and detained by the taxing authorities would be considered as a human error and will be covered under the circular No. 41/15/2018-GST dated 13.04.2018 and 49/23/2018-GST dated 21.06.2018, as the number mentioned in the e-way bill was UP-13T/6755 and the mistake is of only of HR-73 in place of U.P.-13T.

8. It is not in dispute that goods