2021 (12) TMI 899 - HC - VAT and Sales Tax

Court orders correction of tax period in challan, no penalties for inadvertent errors

La Mode Fashions Private Limited Through Its Director Ashwani Kumar Gupta Versus Commissioner, Value Added Tax Through Value Added Tax Officer

The High Court of Delhi granted the writ petition, directing the respondent to correct the tax period in the challan and accept the returns for the 2nd ... Rectification of mistake - remedial measure by which the inadvertent and bonafide error can be corrected - Seeking to amend the tax period of the challan - tax period to be reflected as for the 2nd quarter of 2016-17 instead of 2nd quarter of 2015-16 - HELD THAT:- Imposition of penalty is called for where the assessee fails to furnish returns by the due date, which is not the position in the present case. Admittedly, Petitioner has deposited the requisite tax for the relevant quarter of the assessment period but has inadvertently mentioned the wrong period in the challan and therefore, cannot be, saddled with the liability of penalty. The issue can be resolved by issuing a writ of mandamus to the Respondent to treat and read the period ‘01.08.2015 to 31.08.2015’ mentioned in the challan dated 29.09.2016, bearing No. 0510133290920160000156, issued by the HDFC Bank Ltd., as ‘01.08.2016 to 31.08.2016’. This will obviate the lengthy and complicated procedure of applying for refund and deposit on the part of the Petitioner and will also save him from any penalty under the Tax Statute. The Respondent is directed to read the period ‘01.08.2015 to 31.08.2015’ mentioned in the challan dated 29.09.2016, bearing No. 0510133290920160000156, issued by the HDFC Bank Ltd., as ‘01.08.2016 to 31.08.2016’ - the Respondent is directed to accept the returns for the 2nd quarter of 2016-2017 - petition allowed. Issues:1. Correction of tax period in challan2. Acceptance of returns for the 2nd quarter of 2016-2017Issue 1: Correction of tax period in challanThe petitioner filed a writ petition seeking a mandamus to amend the tax period in a challan dated 29th September, 2016, from the 2nd quarter of 2015-2016 to the 2nd quarter of 2016-2017. The petitioner had deposited an excess amount for the 2nd quarter of 2015-2016 due to an inadvertent error in the challan. Despite the error being brought to the respondent's attention, no action was taken. The respondent acknowledged the error but suggested a complex procedure for correction involving a refund application and re-deposit, which would attract penalties. The court found that the petitioner had deposited the correct tax amount but mentioned the wrong period in the challan, concluding that the petitioner should not be penalized for this inadvertent error. The court issued a writ of mandamus directing the respondent to correct the period mentioned in the challan to avoid the need for a refund application and penalties.Issue 2: Acceptance of returns for the 2nd quarter of 2016-2017The petitioner also sought direction to the respondent to accept the returns for the 2nd quarter of 2016-2017. The respondent had initially refused to correct the tax period in the challan, suggesting the petitioner claim a refund and re-deposit the amount. The court, after considering the facts and the inadvertent error made by the petitioner, directed the respondent to accept the returns for the 2nd quarter of 2016-2017 in light of the corrections made to the challan. The court allowed the writ petition, granting relief to the petitioner.In conclusion, the High Court of Delhi granted the writ petition filed by the petitioner, directing the respondent to correct the tax period mentioned in the challan and accept the returns for the 2nd quarter of 2016-2017. The court emphasized that the petitioner should not be penalized for an inadvertent error and that a simple correction in the challan would suffice to rectify the situation, avoiding the need for a refund application and penalties.