'Mistake In E-way Bill Was Human Error' | Madhya Pradesh High Court Quashes Penalty Under CGST Act

The Madhya Pradesh High Court recently quashed the penalty imposed under the Central Goods and Service Tax Act, 2017 on a private company after the petitioner argued that the mistake while generating the e-way bill was an inadvertent human error.

The division bench of Justice Sheel Nagu and Justice Virendra Singh, while allowing the appeal, observed that the mistake in the e-way bill was bonafide. However, the court said the authorities will be at liberty to consider the case of the petitioner for the imposition of a minor penalty while treating the mistake in question to be a clerical mistake as per Circular dated 14.09.2018 issued by the Ministry of Finance, Government of India.

The petitioner, a private company engaged in the business of copper cables, entered into an agreement with one M/s Bajaj Electricals Ltd. for the supply of certain goods. As per the agreement, the goods had to be delivered at the factory in Bhopal. The agreement ultimately ensued in the transportation of a consignment through M/s Maxwell Logistic Pvt. Ltd. by vehicle.

A tax invoice was generated which reflected the destination as well as the registration number of the vehicle. The petitioner generated an E-way bill which was required to be carried along with the consignment. However, the address on the E-way bill was mentioned at the registered office of the consignee at Indore, instead of Bhopal.

The department initiated proceedings under Section 129 of the Central Goods and Service Tax Act, 2017, which ultimately resulted in the passing of the order by which the liability of additional tax as well as a penalty was imposed against the petitioner. The appeal against the order was also dismissed. The petitioner before the High Court had challenged the order passed by the original as well as the appellate authorities.

The petitioner contended that the mistake while generating the E-way bill was an inadvertent human error and there was no intention to evade the tax liability.

Case Title: Maharaja Cables (C/O Maxwell Logistic Pvt Ltd) Vs Commissioner (GST) State Tax Indore (M.P.)

Case citation: 2022 LiveLaw (MP) 212

Date: 02.09.2022

Counsel For Petitioner: Advocate Himanshu Khemuka

Counsel For Respondent: Government Advocate Naveen Dubey

Click Here To Read The Judgement