Heard Ms. Y.Siri Reddy, learned counsel for the petitioner, and Mr. L.Venkateshwar Rao, learned Government Pleader for Commercial Taxes appearing for the respondents.

2. Challenge made in this writ petition is to the order dated 31.01.2022, passed by respondent No.1, dismissing the appeal filed by the petitioner.

3. It may be mentioned that petitioner-company is registered with the Goods and Services Tax (GST) authorities in the State of Telangana. It was transporting a pharma drug called ‘pregabalin’ in bulk quantity from one of their units in Medchal to another unit in Nalgonda District by way of stock transfer under e-way bill dated 25.11.2020. The vehicle carrying the pharma drug was intercepted by Respondent No.2- Deputy State Tax Officer, Jeedimetla Circle (Proper Officer) on 25.11.2020 at 11.45 a.m. There was mismatch between the registration number of the vehicle and the vehicle number mentioned in the e-way bill. Statement of the driver was found to be not satisfactory. Thereafter, the vehicle was detained. Subsequently, Proper Officer issued show cause notice to which, reply was filed by the petitioner.

4. Proper Officer passed order dated 26.11.2020, levying tax of Rs.9,19,626/- being both Central GST and State GST and equivalent amount of penalty under Section 129(3) of the Central GST Act, 2017, and the Telangana GST Act, 2017.

5. Against the above order dated 26.11.2020, petitioner preferred an appeal before respondent No.1. After referring to the instructions contained in the Circular dated 14.09.2018, issued by the Central Board of Indirect Taxes and Customs, respondent No.1 took the view that there is gross mismatch of vehicle number, which situation is not covered by the Circular dated 14.09.2018. Therefore, respondent No.1 declined to interfere with the order dated 26.11.2020 and dismissed the appeal on 31.01.2022.

6. Learned counsel for the petitioner submits that no Tribunal has been constituted under Section 112 of the Central GST Act and therefore, against the appellate order dated 31.01.2022, of respondent No.1, petitioner has been compelled to approach this Court by filing writ petition.

7. At the outset, we may advert to the order dated 31.01.2022. Relevant portion of the order dated 31.01.2022 reads under:

“Before going into the question, it should be mentioned again that the vehicle number recorded in the way bill was TS08UD1724 where as the vehicle number in which goods transported was TS08UD8391. It may be noted that in the last four digits of the vehicle Nos., not even a single digit matches between the two numbers. One is 1724 and another is 8391. If it was a clerical mistake, the mistake would be in one or two digits but not in all four digits. Obviously, there was something more to it than meets the eye. It should be noted at this juncture that regulatory provisions of taxation acts are meant to prevent evasion of tax. The columns relating to vehicle number in e-way bill cannot be taken lightly or brushed aside as of no consequence. Gross mismatches in vehicle numbers are indicative of evasion or avoidance of tax. There could be situations where the same way bill with same vehicle number may be used to transport multiple consignments in different vehicles without paying tax. It is for the tax payer to come clean with convincing explanation. In this case I do not find such convincing explanation coming from the Appellate Company.

With regard to the contention that penalty of Rs.50,000/- is sufficient under Section 125, it should be noted that the mistake of gross mismatch of vehicle number in this case is not a minor mistake. Hence Section 125 is not applicable. With regard to the circular instructions of CBIC in Circular number 64/38/2018-GST, dt.14.09.2018, it may be noted that the circular lists out the following situations as minor mistakes.

a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, wherever applicable, is correct.

b) Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PINM code should not have the effect of increasing the validity period of the e-way bill;

c) Error in the address of the consignee to the extent that the locality and other details of the consignee are correct;

d) Error in one or two digits of the document number mentioned in the e-way bill;

e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct;

f) Error in one or two digits/characters of the vehicle number.

It can be seen that gross mismatch of vehicle number is not a situation listed in the circular. With regard to the case of Bhushan Power & Steel Limited cited by the Appellate Company, it should be noted that the said case related to filling up of Part-B of e-way bill and not mismatch of vehicle numbers. Hence it cannot be applied here.

In view of the detailed discussion made here above, I find no substance in the contentions of the Appellant Company against levy of tax and equal amount of penalty under Section 129 (3) of the GST Act and hereby dismiss the Appeal upholding the order passed by the proper officer.”

8. Learned counsel for the petitioner submits that on stock transfer, there can be no levy of GST and such a view has been taken by this Court in SAME DEUTZFHR INDIA P. LTD. V. STATE OF TELANGANA 2020 (43) G.S.T.L. 673 (Telangana).

9. In SAME DEUTZFHR INDIA P. LTD. V. STATE OF TELANGANA (1 supra), it has been held as follows:

“11. A reading of the counter-affidavit indicates that 3rd respondent does not dispute that petitioner’s registration certificate in the State of Telangana itself would disclose that its principal place of business is Hayathnagar and its additional place of business is at Bongulur village, Ibrahimpatnam Mandal. The 3rd respondent could have simply verified this fact in GST portal of the Government of India.

12. We do not accept the plea of the respondents that at the time of detention of the goods, the transporter/driver of vehicle did not tell them that at Bongulur village, Ibrahimpatnam Mandal, the petitioner has an additional place of business. No reasonable person when asked to pay GST and penalty of more than Rs.6 lakhs, would keep quiet and meekly pay up without bringing the said facts to the notice of the detaining authority.

13. The payment by the petitioner of the tax and penalty demanded by 3rd respondent was obviously under economic duress apprehending that the 3rd respondent was likely to confiscate the goods and arrest its officials under the Act.

14. Once it is clear that petitioner has additional place of business in the State of Telangana in Bongulur village, Ibrahimpatnam Mandal and the goods were being transported to that address from its Corporate office at Ranipet, Tamil Nadu State, it cannot be said that the petitioner was indulging in any illegal activity when the tax invoice shows that the supplier is the petitioner’s Corporate office in Ranipet, Tamil Nadu State and that it was shipped to its Depot in Bongulur village in Ibrahimpatnam Mandal.

15. There was no occasion for the 3rd respondent to collect tax and penalty from the petitioner on the pretext that there is illegality in the transport of goods as it would merely amount to stock transfer and there is no element of sale of goods or services in it.

16. In any event, now that 3rd respondent is made aware that petitioner has the principal Office at Tamil Nadu and principal place of business at Hayatnagar and additional place of business at Bongulur village, Ibrahimpatnam Mandal, the tax and penalty collected from the petitioner cannot be allowed to be retained by respondents.

17. Accordingly, the Writ Petition is allowed; and respondents are directed to refund within four (04) weeks the sum of Rs.6,70,448/- collected towards CGST and State GST and penalty from the petitioner with interest @ 9% p.a. from 05-03-2020 till date of payment to petitioner by the respondents. The 3rd respondent shall also pay costs of Rs.1,500/- (Rupees One Thousand and Five Hundred only) to the petitioner.”

10. In view of the decision rendered by a coordinate bench of this Court in SAME DEUTZFHR INDIA P. LTD. V. STATE OF TELANGANA (1 supra), we are of the view that respondent No.1 should reconsider the Order dated 31.01.2022.

11. Accordingly, order dated 31.01.2022, passed by respondent No.1, is set aside. Matter is remanded back to the file of respondent No.1, who shall hear both sides including the petitioner and thereafter, pass fresh order in accordance with law and in the light of the decision rendered by this Court in SAME DEUTZFHR INDIA P. LTD. V. STATE OF TELANGANA (1 supra).

12. Since the petitioner is before this Court, let it appear before respondent No.1 on 25.07.2022 at 10.30 a.m., whereafter, respondent No.1 shall proceed with the matter in accordance with law.

13. This disposes of the writ petition. No costs.

As a sequel, miscellaneous petitions, pending if any, stand closed.