Summary of the Judgement: M/S Indeutsch Industries Private Limited vs. State of U.P. And Ors

 

Case: This case involved a dispute over a penalty imposed on M/S Indeutsch Industries Private Limited (petitioner) for a clerical error in an e-way bill.

Facts: The petitioner's goods were detained during transportation due to a mismatch between the vehicle number on the e-way bill and the actual vehicle carrying the goods. The petitioner argued it was a clerical mistake as the initially planned vehicle was replaced.

Petitioner's Contentions:

• The mistake was a clerical error due to a change in the transporting vehicle.
• All other documents (tax invoice, packing list, bill of entry) were in order.
• Custom duty was paid, proving legitimate movement of goods.

Respondent's Contentions:

• The different vehicle number wasn't a clerical error.
• Short distance between origin and destination raised suspicion of potential tax evasion through reusing the e-way bill.

Court's Observations:

• The short timeframe since leaving the SEZ unit ruled out misuse of the e-way bill.
• Burden of proof shifts to the department to prove tax evasion intent when the error is clerical.
• The petitioner's documents (invoices, bill of entry) were not challenged by the department.
• The department failed to investigate the petitioner's explanation for the vehicle change.

Court's Decision:

• The petition was allowed.
• The penalty orders were quashed and set aside.

Reasoning:

• The clerical error in the e-way bill didn't establish an intention to evade tax.
• The department failed to disprove the legitimacy of the goods' movement.

Key Takeaways:

• Clerical errors in e-way bills might not attract penalties if the department can't prove tax evasion intent.
• Proper documentation strengthens the case against penalty imposition.
• The burden of proof shifts depending on the nature of the error in the e-way bill.

Additional Notes:

• The judgement refers to the principle established in "Falguni Steels" case: intention to evade tax is crucial for penalty imposition.
• The court criticized the Appellate Authority for not considering all documents presented by the petitioner. 

• The decision of the Court:

  The court allowed the petition and quashed and set aside the impugned orders.

  Case Title: M/S Indeutsch Industries Private Limited vs. State of U.P. And Ors.

  Coram: Hon’ble Mr. Justice Shekhar B. Saraf

  Case No.: WRIT TAX No. - 1314 of 2019

  Advocate for the Petitioner: Mr. Nishant Mishra

  Advocate for the Respondent: C.S.C

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