Punjab and Haryana High Court rule in favor of the petitioner

Punjab and Haryana High Court rule in favor of the petitioner

The judges rule out any wrong intent to evade tax

A division bench of the Punjab and Haryana High Court has ruled that a discrepancy in the quantity of goods mentioned in the E-way bill under the Goods and Services Tax (GST) cannot attract Section 129 of the (CGST) Central Goods & Services Act, 2017.

The petitioner is engaged in the business of copper wires and copper scraps, which are purchased from dealers located throughout the country. He is registered under the Delhi GST Act, 2017/CGST Act, 2017.

He claimed that he had sold copper scraps to RNT Metals Pvt. Ltd, Bhiwadi in Rajasthan for an amount of Rs.83,69,594 (including IGST @ 18 percent). While the goods were in transit, the respondent at Manesar intercepted the same in November 2021. The goods had a valid invoice and E-way bill. On being questioned, the documents were provided to the authorities. However, a GST Form was issued against the vehicle carrying the goods.

The department contended that on verification, it found a discrepancy in the actual quantity and the quantity shown in the invoice and e-way bill. The actual quantity was 90 kgs and 700 gms more than mentioned in the invoice. The department said that the petitioner had intended to evade tax.

The bench comprising Justice Ajay Tewari and Justice Pankaj Jain held, "In light of the fair stand taken by the petitioner and the fact that the mismatch cannot be termed as a contravention of the provisions of the Act, we deem it appropriate to allow the writ petition. Proceedings against the petitioner under the Act are quashed."

The court further said, "The fine and penalty, if any, imposed against the petitioner and deposited by him, should be refunded to him within 15 days. Since the goods already stand released, no further order is required."

The judges held that it could not be said that the petitioner had any intention of evading the tax. Also, the mismatch in the quantities was not such that it entailed proceedings under the Act.

"A person, who has already paid a tax of Rs.1,276,717.68 on a consignment cannot be said to have an intent to evade a tax amounting to Rs.11,000. At the same time, the petitioner is willing to pay the tax and penalty of Rs.22,000 imposed by the State authorities," the court ruled.