EWB CLERICAL ERROR WE GOT NOTICE ISSUE IN STATE, Goods and Services Tax - GST

[MUTHUKUMARAN K]

FY 2020-2021 Importer raised two E-Way bill wrongly mention transporter name instead of supplier name in PART-A. Now December 2024 Transporter got a Show Case Notice from State Commercial Tax Office for different on turnover between EWB and GSRT-1. Transporter clearly explain and submit EWB and Bill of Entry with duty payment challan. But they issued order under section 73. Transporter submit all documents through application for rectification of order but they can't accept and reject. Now they told apply appeal with 10% pre deposit Aprox Rs.100000/- .

Any body pls advise how to solve this issue.

K.MuthuKumaran

Chennai.

Posts / Replies

[Sadanand Bulbule]

While concluding adjudication under Section 73, there is no provision to levy penalty for defective E-way bills. Find out under what section such penalty is levied. In terms of Section 161, you may apply for rectification of error apparent on the impugned order. However you have to establish the error properly and file application within three months from the date of communication of the order issued under Section 73.

[MUTHUKUMARAN K]

Sir thanks for your reply.

we got notice section 61,73 and 50 of the TNGST Act 2017.

as per your advise file the application means Appeal or Rectification of Order.

K.Muthu Kumaran

Chennai

[Sadanand Bulbule]

Application for rectification of error, if any, under Section 161 is to be filed within three months from the date of communication of order. Otherwise appeal is to be filed under Section 107 within three months and additional one month with condonation of delay

[Sadanand Bulbule]

Is penalty levied under Section 122 for defective E-Way Bills along with adjudication order under Section 73?

[YAGAY andSUN]

Legal Advisory Note on E-Way Bill Error and Adjudication under Section 73 of the TNGST Act, 2017

Factual Background:

1. An importer during FY 2020–21 had generated two E-Way Bills wherein, by inadvertent error, the name of the transporter was wrongly mentioned in Part-A in place of the supplier's name.
2. In December 2024, the said transporter received a Show Cause Notice (SCN) from the State Commercial Taxes Department alleging a discrepancy in turnover between the E-Way Bill (EWB) data and the GSTR-1 returns filed.
3. The transporter duly submitted a reply along with supporting documents including:
   • The erroneously generated E-Way Bills.
   • Bill of Entry evidencing the import.
   • Duty payment challans.
4. Notwithstanding the above, the Department proceeded to pass an order under Section 73 of the TNGST Act, 2017, allegedly confirming demand and imposing penalty.
5. The transporter then filed an application for rectification under Section 161 on the grounds of an error apparent on the face of record, which was summarily rejected.
6. The Department advised filing an appeal under Section 107 with a mandatory pre-deposit of 10% of the disputed amount, approximately ₹1,00,000.

Legal Position and Relevant Provisions:

1. Section 73 – Determination of Tax Not Paid or Short Paid Without Fraud, etc.:
   • This section pertains to tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilized, for any reason other than fraud or willful misstatement or suppression of facts.
   • It does not provide for imposition of penalty in cases of technical or clerical errors in E-Way Bills unless such errors result in tax evasion or suppression of turnover.
2. Penalty for Defective E-Way Bills – Section 122 of the TNGST Act, 2017:
   • Any person who transports goods without proper documents, including defective or incomplete E-Way Bills, may be penalized under Section 122(1)(xiv).
   • However, this applies only when there is intent to evade tax or transport without authorization/documentation.
   • Mere incorrect mention of a transporter in Part-A of the EWB, when duty-paid import documents and genuine supplier information are on record, does not constitute an offence under Section 122.
3. Section 161 – Rectification of Errors Apparent on the Face of Record:
   • Permits correction of any error apparent on the face of the record by the adjudicating authority within 3 months from the date of communication of the order.
   • An "error apparent" refers to a clerical or arithmetical mistake, or an undisputed factual error, not requiring elaborate arguments or re-appreciation of evidence.
   • Given the clerical error in the EWB and availability of conclusive documentary evidence (Bill of Entry, challans), Section 161 rectification ought to have been entertained.
4. Section 107 – Appeals to Appellate Authority:
   • If rectification under Section 161 is rejected, the aggrieved person can file an appeal under Section 107 within:
     • 3 months from the date of communication of order.
     • 1 additional month with condonation of delay (if sufficient cause shown).
   • A pre-deposit of 10% of the disputed amount is mandatory for admission of appeal.

Conclusion and Recommendation:

• No Penalty under Section 73 can be levied merely due to clerical errors in E-Way Bills where no suppression, fraud, or evasion is involved.
• Section 122(1)(xiv) may be invoked only where the movement of goods was without documents or with intent to evade tax, which is not applicable in the present facts.
• The order passed appears to be perverse and in violation of principles of natural justice, especially when all documentary evidence was produced.
• Since the application under Section 161 was rejected, the only remedy now available is to prefer an appeal under Section 107 of the TNGST Act, 2017.
• Ensure that the appeal is filed within the prescribed period, along with the statutory pre-deposit of 10%.
• In the appeal grounds, clearly plead:
  • Clerical nature of the E-Way Bill error.
  • Production of valid import documents and tax payment evidence.
  • Misapplication of Section 73 and 122, if invoked.
  • Denial of rectification despite being a clear error apparent.

Suggested Action Plan:

1. File a formal appeal under Section 107 along with Form GST APL-01.
2. Deposit 10% of the disputed amount under protest.
3. Attach all supporting documents:
   • Copy of the impugned order.
   • Rejected rectification application.
   • Bill of Entry, duty challans, copy of correct EWB, and a comparative table.
4. Plead for setting aside the order and seek refund of the pre-deposit upon favorable disposal.

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