2020 (3) TMI 722 - Commissioner - GST

Appellate Authority Overturns Penalty for Typo Error in Tax Filing

MAHALAKSHMI PACKAGERS MANUFACTURE Versus ACST & E-CUM-PROPER OFFICER, PAONTA CIRCLE-II

The appellate authority set aside the order of the Assistant Commissioner, finding the penalty imposed under Section 129(3) of the CGST/HPGST Act, 2017 to ... Invocation of proceedings u/s 129 of the CGST/HPGST Act - vehicle number was written wrong in E-way Bill and rightly on invoice issued by the appellant - HELD THAT:- It is revealed that due to a typographic error by the consignee while issuing tax invoice and generating E-way Bill, the Vehicle No. HP-17B1790 has been mentioned instead of the Vehicle No. HP-17B-4290 on both tax invoice and as well as in E-way Bill. Apart from this there is no dispute on quantity/quality of goods in question and validity of E-way Bill. The consignment was intercepted on dated 4th Dec., 2018 and thereby a tax/ penalty has been imposed under Section 129(3) of HPGST/CGST Act, 2017 for contravention of HPGST Rule, 138. As per the facts in hand it appears that the mistake of two digits while entering vehicle no. in invoice and E-way Bill is a typographic error and may be treated as a minor one. Therefore, the appeal of the appellant is accepted and the order of the Assistant Commissioner State Taxes & Excise-Cum proper officer Paonta Circle-Il is set aside. The additional demand of ₹ 57,708/- deposited by the appellant may be refunded and the penalty of ₹ 500/- under SGST and ₹ 500/- under CGST u/s. 125 of CGST/HPGST Act, 2017 is imposed on the Appellant in accordance to CBIC Circular No. 64/38/2018-GST, dated 14th Sep., 2018 and the state Circular No. 12-25/2018-19-EXN-GST-(575)6009-6026, dated 13th March, 2019. The judgment in this case was reserved on 21-1-2020 and is released. Issues Involved:1. Legality of the order passed by the Assistant Commissioner State Taxes & Excise.2. Validity of the tax and penalty imposed under Section 129(1) of HPGST & CGST Act, 2017.3. Applicability of mens rea in the imposition of penalty.4. Relevance of clerical errors in E-way Bills as per CBIC Circular No. 64/38/2018-GST.Issue-wise Detailed Analysis:1. Legality of the Order Passed by the Assistant Commissioner State Taxes & Excise:The appellant challenged the order dated 4-12-2018, which imposed an additional demand of Rs. 57,708/-. The appellant argued that the order was unjust, unlawful, and sketchy, and that the Assistant Commissioner did not provide a speaking order, failing to conduct themselves as a quasi-judicial authority.2. Validity of the Tax and Penalty Imposed under Section 129(1) of HPGST & CGST Act, 2017:The appellant's vehicle was intercepted, and a clerical mistake was found in the E-way Bill. The vehicle number mentioned in the invoice and E-way Bill did not match the intercepted vehicle. The Assistant Commissioner imposed a tax/penalty of Rs. 57,708/- under Section 129(3) of the CGST/HPGST Act, 2017 for contravention of HPGST Rule, 138. The appellant argued that the mistake was typographical and not intentional.3. Applicability of Mens Rea in the Imposition of Penalty:The appellant cited Section 81 of the Indian Penal Code, emphasizing the principle of mens rea, which requires criminal intention for an act to be considered an offense. The appellant argued that the clerical mistake did not involve any criminal intent. The respondent countered that the case involved actus rea (action) rather than mens rea (intention), suggesting a planned tax evasion scheme.4. Relevance of Clerical Errors in E-way Bills as per CBIC Circular No. 64/38/2018-GST:The appellant relied on CBIC Circular No. 64/38/2018-GST and a state circular, which provided that minor errors in E-way Bills should not attract penalties. These errors include mistakes in the vehicle number, provided other details are correct. The respondent argued that circulars are informative and not regulatory, and the circular did not cover the use of incorrect vehicle numbers in both the invoice and E-way Bill.Judgment:After hearing both parties, the appellate authority noted that the mistake in the vehicle number was typographical and did not indicate an intention to evade tax. The proper officer imposed the penalty mechanically, ignoring the guidelines from the circulars. The authority concluded that the penalty under Section 129(3) of the CGST/HPGST Act, 2017 was unsustainable.The appeal was accepted, and the order of the Assistant Commissioner was set aside. The additional demand of Rs. 57,708/- was ordered to be refunded, and a penalty of Rs. 500/- under SGST and Rs. 500/- under CGST was imposed on the appellant in accordance with the relevant circulars. The judgment was reserved on 21-1-2020 and released subsequently.Conclusion:The appellate authority found the penalty imposed by the Assistant Commissioner to be unjustified due to the typographical nature of the error and the lack of intent to evade tax. The appellant was granted relief, and a minor penalty was imposed as per the guidelines in the circulars.