IMPORTANT POINT
Intention to evade tax should be present for imposing a penalty under Section 129 of the Act, and in cases of typographical or clerical errors, no presumption of tax evasion arises.

JUDGMENT :

1. Heard Sri Shubham Agrawal, counsel appearing on behalf of the petitioner and Sri Ravi Shanker Pandey, learned Additional Chief Standing Counsel appearing on behalf of the respondents.

2. This is an application under Article 226 of the Constitution of India, wherein the writ petitioner seeks a writ of certiorari for quashing the penalty order dated February 14, 2020 and the order passed in appeal dated October 13, 2020.

Facts of the case

3. Petitioner is engaged in the business of manufacturing and selling of pressure cookers under the brand name of Hawkins. The principal place of business of the petitioner is situated at 83/6, ?.?. Market, Juhi, Kanpur, The factory of the petitioner is situated at Plot No. A-1, A-2, A-14, A-15, SIDA Industrial Estate, Satharia, Jaunpur. Petitioner purchases/stock transfers various parts/raw materials for manufacturing of pressure cookers from outside the state of UP, for being delivered in its factory (manufacturing unit) situated at Satharia, Jaunpur. The petitioner had purchased the raw materials for manufacturing of pressure cookers in the month of January 2020, from various suppliers situated in Maharashtra. Petitioner, thereafter, stock transferred certain raw materials from Maharashtra, for being delivered to its factory. In four out of the 8 E-Way bills, the place of supply has been correctly mentioned to be the factory of the petitioner situated at Satharia, Jaunpur. In the other 4 E-Way bills, the place of supply has been wrongly mentioned to be the principal place of business of the petitioner situated at Kanpur, where no manufacturing is done. The reason for the aforesaid mistake having been done by some of the parties is that on filling the GSTIN (registration number) of the petitioner while generating the E-Way bill, the principal place of business is automatically reflected in the place of supply(which is auto populated). It is the duty of the person generating the E-Way bill to change the place of supply if the same is different from the principle place of business.

4. The goods were intercepted on January 31, 2020 and the memo of detention was issued on February 1, 2020 and subsequently the goods were seized on February 3, 2020 by issuing MOV-06.

Contentions of the Petitioner

5. Mr. Shubham Agarwal, Advocate has submitted that due to an inadvertent error/overlooking by the accountants of the suppliers who generate the E-Way bill, they failed to change the place of supply which is automatically displayed. Thus the E-Way bills have been generated containing the wrong place of supply of goods at Kanpur instead of Satharia, Jaunpur. The delivery of raw materials cannot be taken by the petitioner at Kanpur, since the raw materials are required for manufacturing of pressure cookers which is done only at its factory in Satharia, Jaunpur, and not at the principal place of business. Thus the mentioning of wrong place of supply in the E-Way bill was merely a technical breach.

6. He further submitted that the addresses that were wrongly written in the four e-way bills were addresses of the registered office of the petitioner. He submitted that the same was a technical error only as there was no intention of the petitioner to hide the destination in the e-way bills. Infact, he submitted that all the invoices and the bilties that were accompanying the goods bear the correct address of destination that is Jaunpur. The mistake committed in the four e-way bills with regard to mentioning of the registered office of the petitioner can only be seen as a clerical and typographical error and nothing more. He relied on a judgement of this Court in M/s Hindustan Herbal Cosmetics Vs. State of U.P. and others in Writ Tax No.1400 of 2019 dated January 2, 2024, where this Court on a similar factual matrix had quashed the penalty order and the order passed in appeal.

7. Per contra, Mr. Pandey, submitted that the error/mistake in this case was grave in nature and raised a presumption of evasion of tax