Clerical error in transport documents cannot justify VAT penalty absent proof of intent to evade tax.

Penalty under the Punjab Value Added Tax Act, 2005 was held unsustainable where the consignee detail mismatch arose from a clerical error and the invoices, goods receipt and packing list were voluntarily produced at the inter-state check post. The Court found that the wrong destination printed by the computer code did not, by itself, establish concealment or intent to evade tax, especially when the goods were actually sent to Ludhiana and the surrounding documents supported the explanation. It also noted that the Tribunal had departed from its earlier view on similar facts without giving reasons. The questions of law were answered in favour of the assessee and against the Revenue.

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Issues: Whether penalty under the Punjab Value Added Tax Act, 2005 was sustainable where the discrepancy in the consignee details arose from a clerical mistake and the relevant invoices and transport documents were voluntarily produced at the inter-state check post, and whether the Tribunal was justified in taking a different view from its earlier decision on similar facts.

Analysis: The goods were accompanied by the invoices, the goods receipt and the packing list. The only discrepancy was that the computer code led to the wrong destination being printed, though the goods were actually sent to Ludhiana. The voluntary production of the documents supported the explanation that the error was inadvertent and not a device to conceal the movement of goods. In such circumstances, the element of intention to evade tax was not established. The Court also noted that the Tribunal had adopted a different view from its own earlier decision on similar facts without giving any reason.

Conclusion: The penalty was not justified and the questions of law were answered in favour of the assessee and against the Revenue.

Final Conclusion: The assessee succeeded in challenge to the penalty, and the assessment of evasion was rejected for want of proof of any deliberate intent.

Ratio Decidendi: A penalty for evasion cannot be sustained on a mere clerical or inadvertent discrepancy in transport documents when the accompanying records are produced voluntarily and the materials do not establish an intent to evade tax.

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