26 April 2022 12:17 PM GMT
The Kerala High Court bench of Justice Bechu Kurian Thomas has held that a minor penalty can be imposed for a bona fide mistake in the date on an e-way bill. The petitioner/assessee has a valid GST registration and carries on business in electrical contract work. In connection with the work of a hospital in Assam, some goods were transported by a vehicle after paying the required...
The Kerala High Court bench of Justice Bechu Kurian Thomas has held that a minor penalty can be imposed for a bona fide mistake in the date on an e-way bill.
The petitioner/assessee has a valid GST registration and carries on business in electrical contract work. In connection with the work of a hospital in Assam, some goods were transported by a vehicle after paying the required tax. During the course of transportation from Ernakulam, the goods were intercepted by the department, who detained the goods under section 129 of the Central Goods and Service Tax Act, 2017 on noticing an irregularity in the e-way bill.
Though the goods were being transported on 02.03.2021 (2nd March, 2021), the invoice mentioned the date as 03.02.2021 (3rd February, 2021). There was a discrepancy in the date mentioned in the invoice.
According to the petitioner, the error occurred due to the default computer formatting system. Instead of day-month-year (dd-mm-yyyy) formatting for the Indian system, the computer-generated bill provided a month-day-year (mm-dd-yyyy) format. As a result, instead of 02.03.2021, the invoice bill mentioned the date as 03.02.2021. Due to the irregularity in the invoice, the goods were detained and tax along with the penalty was demanded.
The petitioner contended that the detention of goods and the demand for furnishing security for the alleged tax and penalty payable were illegal and without authority. It was submitted that the default formatting system in the computer which generated the invoice as "mm-dd- yyyy" instead of the format adopted in India as "dd-mm-yyyy" was the cause of the mistake and that, for such an inconsequential and minor mistake, the petitioner ought not to be subjected to such huge liabilities. The petitioner relied on CBDT circulars dated 14-09-2018 and contended that minor errors should not be penalised so severely.
The department contended that the remedy of the petitioner was to invoke the appellate forum under the statute and not by invoking the provisions of Article 226 of the Constitution of India. The mistake in the format could have been purposeful for evasion of tax, and hence the disputed question ought not to be considered by the court.
The court observed that a statutory circular was issued to mitigate the hardships being caused to taxpayers for minor discrepancies, which had no bearing on the liability to tax or on the nature of goods being transported. The circular was statutory in nature and was binding on the tax officers. Thus, minor discrepancies cannot be penalised contrary to the mode and procedure contemplated under the Circular.
The court noted that the discrepancy pointed out is only on the invoice date, which was shown as 03.02.2021, while that shown in the e-way bill was 02.03.2021. All other details in the invoice and the e-way bill, including the nature of goods transported, the details of consignor and consignee, the GSTIN of supplier and recipient, place of delivery, invoice number, value of goods, HSN code, vehicle number, etc. had no discrepancy.
The court held that inaccuracy in date format warranted imposition of only a minor penalty. The extent of tax and penalty imposed upon the petitioner was perverse and illegal, warranting interference under Article 226 of the Constitution of India.
Case Title: Greenlights Power Solutions Versus State Tax Officer
Citation: 2022 LiveLaw (Ker) 193
Counsel For Petitioner: Advocate Gigimon Issac
Counsel For Respondent: Advocate M.M.Jasmin
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