GST | Mismatch In E-Way Bill Destination Is Substantive Violation, Not Bonafide Error: Madhya Pradesh High Court

In a recent order, a Division Bench comprising Justice Vivek Rusia and Justice Pradeep Mittal emphasized on how during transportation of the goods 'no steps' were taken to correct the mistake in E-way Bill. This indicated mens rea, the High Court opined. It observed that mentioning of Indore as destination address in E-way Bill instead of Jabalpur could neither be treated as 'a bonafide mistake' nor a minor clerical error but a substantive violation.

Also, as except for E-way Bill there were no supporting documents evidencing that goods were actually booked for the warehouse in Jabalpur, the High Court stated that

“There could be a modus operandi behind this; otherwise, number of consigners is not likely to commit the same error and come up with a plea that it was a bona fide error on their part.”

Petitioner, a manufacturer of lead-acid batteries was transporting batteries from Ahmedabad warehouse to Jabalpur warehouse for which it engaged a clearing and forwarding agent/transporter. It paid IGST and SGST amounting to Rs. 2,17,305.

Due to the mismatch in address of the consigner in the Consignment note, invoices and the E-way bill, goods were detained. The concerned Authority of GST found that there was a violation of Section 129 of the Madhya Pradesh Goods and Services Tax Act, 2017 and seized the goods. Thereafter, penalty equivalent to tax paid was imposed. On appeal, the Joint Commissioner dismissed the same.

According to the Petitioner, on account of a clerical error the destination address for delivery of goods was rightly mentioned in the Consignment Note as well as Invoices, but inadvertently, in the E-way bill wrongly mentioned the destination address as Indore.

Opposing the plea of bonafide mistake, the GST Department contended that E-Way bill must match actual route and for a mismatch penalty was to be imposed. A CBIC Circular of 2018 was referred to by the Department to state that Circular clause 5(c) would be inapplicable as entire address was wrong and not just locality.

The Madhya Pradesh High Court held that consignment bills as well as invoices, the correct address of

consigner and consignee were mentioned, but only in the E-way bill, the address was wrongly typed as "location at Indore" in place of "location at Jabalpur". Further, it was noted that no office record like, a ledger, account books, or goods movement register, to show that these goods were booked and transported for the warehouse at Jabalpur.

The Madhya Pradesh High Court traced the events from generation of E-way Bill till detention of the tuck and concluded that the truck travelled approximately 11 hours before detention, which was 'sufficient time' to correct any mistake in the E-way bill.

Reliance placed by the Petitioner on the cases of Robbins Tunnelling and Create Consults were dismissed on facts since herein both consignor and consignee were same.

Thus, the Madhya Pradesh High Court rejected the request for refund of penalty highlighting that even if tax was paid, penalty under Section 129 was mandatory.

Case Detail: Amara Raja Batteries Limited vs. The State of Madhya Pradesh & Ors.

For Petitioner: Advocate Sahil Sharma

For Respondent: Government Advocate Rajvardhan Datt Padhrahan

Click here to read the order.