Department cannot impose double tax on the same goods under two different transactions.

Case Title: Mriganka Sarkar v. Union of India

Court: High Court of Calcutta

Petition Number: W.P.A. 621 of 2022

Category of Dispute: Refund – Tax paid twice and penalty

Date of Judgement: 07 March 2022

Relevant Sections: Sections 129 and 130 of the CGST Act, 2017 (Implied), Rule 138 of CGST Rules (re: e-Way Bill compliance)

Takeaway: Double Trouble: Tax Paid Twice Due to e-Way Bill Error

Facts of the Case

(Para 1–6)

1. The petitioner, a timber merchant, transported goods on 08.01.2021 with an e-Way Bill showing an incorrect dispatch address — his business address rather than the actual dispatch point (Para 2–3).
2. The vehicle was intercepted by authorities and a penalty was imposed for transporting goods without a valid e-Way Bill. Tax and penalty were paid to release the goods (Para 4).
3. A second e-Way Bill was generated later the same day with the corrected dispatch address. Tax was paid again for the same goods (Para 5).
4. The petitioner sought a refund of the second tax payment and penalty, asserting that tax cannot be collected twice on the same goods (Para 6).

Question(s) in Consideration

(Paras 1, 6–8)

• Whether tax can be collected twice on the same goods due to an unintentional error in the e-Way Bill?
• Whether penalty imposed under such circumstances is liable to be refunded if there is no willful tax evasion?

Observation of Court

(Paras 10–13)

1. The Court noted that tax was paid at the first instance and that the discrepancy in the e-Way Bill arose from an unintentional error by the petitioner (Para 10).
2. There was no indication of a willful attempt to evade tax. The second payment of tax and the penalty were consequences of technical lapses rather than fraud or suppression (Para 13).
3. The Court cited Ashok Kumar Sureka v. Assistant Commissioner, State Tax (WPA 11085/2021) wherein refund was allowed under similar circumstances (Para 12).

Judgement of the Court

(Paras 13–15)

1. Held that tax cannot be collected twice for the same transaction; such double taxation is contrary to law (Para 13).
2. Set aside the orders of the Adjudicating and Appellate Authorities (Para 14).
3. Directed the Directorate of Commercial Taxes to refund both the second tax paid and the penalty within four months, subject to procedural compliance (Para 15).

Between Fine Lines

• If tax is paid once on goods and there is no intention of evasion, a second tax due to clerical error should not be imposed.
• Penalty under such circumstances lacks legal justification.
• e-Way Bill discrepancies can lead to harsh consequences even without fraudulent intent.
• Judicial remedy is available for refund if unjust enrichment of the government is evident.
• Courts are willing to intervene when procedural lapses lead to financial hardship.

Summary of Referred Cases