Discrepancies in documentation do not imply tax evasion when proper documentation is present during stock transfers.

JUDGMENT

Alok Mathur, J.

Heard Shri. Aditya Pande, learned counsel appearing for petitioner, learned Standing Counsel appearing for the State and perused the material available on record.

2. By means of the present petition, the petitioner has assailed the order dated 3.11.2020 passed by the Additional Commissioner Grade-2 (Appeal), Nyayik Sambhag (Legal Division)- Fourth, Commercial Tax, Lucknow thereby rejecting the appeal preferred by the petitioner and confirming the order of the adjudicating authorities dated 09.08.2018 thereby in exercise of power under Section 129 (3) of the U.P. GST Act imposing the penalty for an amount of Rs. 20,241/- as well as tax of Rs. 20,241/-.

3. The brief facts of the case are that the petitioner is a registered dealer under the GST Act and is in business of manufacturing and sale of FMCG goods. It has Head Office in Bombay and for the State of U.P., the office is situated at 120/143 Lajpat Nagar, Kanpur and also has its branch office at Ghaziabad, Varanasi and Lucknow. It is stated that on 06.08.2018 the goods were being transported through Trans- express Logistics India Pvt. Ltd. from Patna Branch (Bihar) to Lucknow Branch (Uttar Pradesh) when they were intercepted and detention order was issued in the form of GST MOV 06 under Section 129 (1) of the U.P. GST, Act on the ground that there was a mismatch in the e-way bill and tax invoice. It was stated that the e-way bill was dated 02.08.2018 and the branch transfer invoice was dated 31.07.2018. Merely noticing that the said mismatch in the dates, the goods were detained and a show cause notice was issued to the petitioner under Section 20 of the IGST Act on the same day i.e., 06.08.2018. The petitioner appeared before the Assessment Commissioner, (Mobile Squad)-4, Lucknow and responded to the notice stating that the mistake was a mere human error and had occurred inadvertently by the person, who was generating the e-way bill on 02.08.2018 and that is why inadvertently the date of invoice was generated indicating the date as 02.08.2018 instead of 31.07.2018. It was further stated that the transaction was stock transfer from Patna Branch to Lucknow Branch and the said transaction was not liable to tax under the U.P. GST Act and consequently prayed for release of the goods.

4. The Adjudicating Officer rejected the contention raised by the petitioner and merely on the account that there was mismatch in the e-way bill and the branch transfer invoice imposed penalty and tax on the petitioner.

5. Learned counsel for the petitioner has submitted that the petitioner is a registered dealer and adhering to the provisions of GST in its letter and spirit. It is stated that in the normal course of business, the petitioner made a stock transfer from its Patna Branch to Lucknow Branch and the vehicle in which the goods were being transported was accompanying with all proper documents, such as, stock transfer of challan, e-way bill etc. and no discrepancy was found in any of the said document except the date indicated in the e-way bill and the branch transfer invoice.

6. He further submits that the goods in question, there is no liability to tax as the goods were being sent from the petitioner's one unit to another and further stated that there is no element of evasion of tax. He further submits that the goods were in transit, which was accompanying with documents and there was a mere technical breach and as soon as the same was informed to the authorities concerned, they should have considered the aforesaid facts in proper perspective and release the goods without any demands/penalty. It was further stated that the goods were being transported from one branch to another and there was no element of tax evasion involved in the present case and accordingly, the proceedings ought to have been dropped by the authorities.

7. Learned Standing Counsel, on the other hand, has supported the impugned order and submits that during the interception of the goods in question