2022 (8) TMI 96 - MADHYA PRADESH HIGH

COURT

AMARA RAJA BATTERIES LIMITED VERSUS THE

STATE OF MADHYA PRADESH, COMMISSIONER,

STATE GST, MOTI BUNGALOW, COMMISSIONER

OFFICE, INDORE (M.P.) , JOINT COMMISSIONER,

STATE TAX CUM APPELLATE OFFICER STATE

GST, DIVISION-2, BHOPAL (M.P.) , STATE TAX

OFFICER, OFFICE OF ASSITANT

COMMISSIONER, COMMERCIAL TAX ANTI-

EVASION BUREAU, BHOPAL (M.P.)

Levy of penalty - Detention of goods alongwith

vehicle - wrong E-way bill - levy of tax and penalty

on the ground of petitioner’s transporter on being

intercepted was found to carry GST paid goods to

petitioner’s office at Jabalpur whereas e-way bill

generated showed destination at Indore - Section

129 of CGST Act - HELD THAT:- It is evident that

strictly going by the terminology used in the immunity

provision under Clause 5 of the circular dated

14.09.2018, the benefit flowing wherefrom may not be

available to the petitioner but this Court hastens to add

that in penal provision such as Section 129 of the GST

Act, the element of intention to evade tax must be

present to sustain an order of penalty. To gather the

intention of the petitioner an inquiry has to be

undertaken to ascertain whether the mistake was

inadvertent with no element of malice or intention to

Authority or the appellate authority has undertaken the

said exercise of conducting an inquiry to ascertain the

real intent behind the act of petitioner to mention

wrong address.

This Court has no manner of doubt that an inquiry

needs to be conducted at the level of appellate

authority to ascertain whether there was any malicious

intention to evade tax on the part of the petitioner or

not.

Petition allowed in part.

No.- Writ Petition No. 6736 of 2022

Dated.- July 22, 2022

Citations:

1. Technosteel Infraprojects Pvt. Ltd., Versus The

State Of Madhya Pradesh Through Principal

Secretary, Department Of Commercial Tax,

Bhopal, Joint Commissioner State Tax,

(Appellate Authority) , Satna, State Tax Officer,

Anti Evasion Bureau, Satna & Sagar Division, -

2022 (4) TMI 696 - MADHYA PRADESH HIGH

COURT

2.
 3. M/s. Create Consults, Represented Through Its

Proprietor Shri Ralston Anil Rajvaidya Versus

The State of Madhya Pradesh Through

Principal Secretary, Commissioner, State GST,

Joint Commissioner, State Tax Cum Appellate

Officer State GST, State Tax Officer, Office of

Assistant Commissioner, Madhya Pradesh -

2022 (4) TMI 704 - MADHYA PRADESH HIGH

COURT

4.

5. Robbins Tunnelling and Trenchless

Technology (India) Pvt. Ltd. Versus The State

of M.P. and others - 2021 (2) TMI 381 -

MADHYA PRADESH HIGH COURT

6.

Hon'ble Shri Justice Sheel Nagu And Hon’ble

Shri Justice Dwarka Dhish Bansal

For the Petitioner : Shri Sahil Sharma, Advocate

For the Respondents : Shri Piyush Dharmadhikari,

Government Advocate

ORDER

This petition under Article 226 of the Constitution of

India assails Annexure P/6 by which the State Tax

Officer invoking its power u/S 68 read with Section 129

of the Central GST Act, has levied tax as well as

penalty on the ground of the petitioner’s transporter on

to petitioner’s office at Jabalpur whereas e-way bill

generated showed destination at Indore. Further

challenge is to the appellate order Annexure P/7 by

which the appeal of petitioner has been rejected.

2. Learned counsel for the rival parties are heard on

the question of admission so also on final disposal.

3. The sole ground raised by learned counsel for the

petitioner in support of the challenge to the aforesaid

two orders Annexure P/6 and Annexure P/7, by

referring to the e-way bill (Annexure P/5), is that due

to inadvertence during generation of the e-way bill, a

clerical error took place due to which the registered

address of the petitioner at Indore was mentioned in

the e-way bill instead of the address at Jabalpur. It is

submitted that since the address which was earlier

shown as Indore as default address in the online

option could not be manually changed and therefore

continued to show the destination of goods as Indore

instead of Jabalpur. Learned counsel for the petitioner

relied upon a Coordinate Bench decision rendered in

WP No.12913/2020 (Robbins Tunnelling and

Trenchless Technology (India) Pvt. Ltd. vs. State

of M.P. and others).

4. Learned counsel for the Revenue on the other hand

relying upon the executive instruction dated

14.09.2018 (Annexure P/9) of the Department of

particular clause 5, submits that exemptions from the

rigour of Section 129 of the GST Act can be availed

on arising of contingencies as enumerated therein.

For ready reference, Clause 5 is reproduced

hereinbelow:

“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;

first 2 digits of HSN are correct and the rate or

tax mentioned is correct;

f) Error in one or two digits/characters of the

vehicle number.”

5. Relying upon the Clause 5 of the aforesaid circular

dated 14.09.2018, learned counsel for the Revenue

Shri Piyush Dharmadhikari submits that one of the

contingencies which may make extend immunity

against Section 129 of the GST Act is that the error in

address of the consignee subject to locality and other

details of consignee is mentioned correctly. It is

submitted by Shri Dharmadhikari that bare perusal of

the e-way bill (Annexure P/5) demonstrate that the

details of locality and other details of the consignee

are incorrectly mentioned and therefore the benefit of

clause 5 in the circular dated 14.09.2018 is not

available to the petitioner. It is further submitted by

Shri Dharmadhikari that the possibility of tax evasion

on the part of the petitioner cannot be ruled out. It is

further submitted that the immunity of clause 5 in the

circular dated 14.09.2018 (Annexure P/9) is

unavailable to persons who do not come with clean

hands and the mistake in the address is not purely

inadvertent with no ulterior motive of evasion of tax.

going by the terminology used in the immunity

provision under Clause 5 of the circular dated

14.09.2018, the benefit flowing wherefrom may not be

available to the petitioner but this Court hastens to add

that in penal provision such as Section 129 of the GST

Act, the element of intention to evade tax must be

present to sustain an order of penalty. To gather the

intention of the petitioner an inquiry has to be

undertaken to ascertain whether the mistake was

inadvertent with no element of malice or intention to

evade tax.

7. It does not appear that either the Taxing Authority

or the appellate authority has undertaken the said

exercise of conducting an inquiry to ascertain the real

intent behind the act of petitioner to mention wrong

address.

8. The reliance placed by the learned counsel for the

petitioner on the decision of Coordinate Bench of this

Court in the case of Robbins Tunnelling and

Trenchless Technology (India) Pvt. Ltd.(supra) and

another decision of this Court rendered on 16.03.2022

in WP No.344/2022 (M/s Create Consults vs. State

of MP and others) and dated 30.03.2022 in WP

No.6118/2002 (Technosteel Infraprojects Pvt. Ltd.

vs. State of MP and others) do not assist the

petitioner as they are distinguishable in as much as

the facts in the said three decisions reveal that

consignee happened to be same but the address and

other details were correct and therefore immunity

available in clause 5(c) of the circular dated

14.09.2018 was available to the petitioners therein.

The present case is attended with distinct facts of

address and other details also not being correct.

9. In the conspectus of above discussion, this Court

has no manner of doubt that an inquiry needs to be

conducted at the level of appellate authority to

ascertain whether there was any malicious intention to

evade tax on the part of the petitioner or not.

10. Consequently, the present petition stands partly

allowed to the following extent:

(i) The impugned appellate order dated

18.12.2019 (Annexure P/7) stands quashed.

(ii) The appellate authority is directed to

reconsider the appeal solely on the question of

presence or absence of any malafide intention

to evade tax on the part of the petitioner and

pass appropriate orders within the outer limit of

three months.