Challan period correction allowed where tax was paid for the right quarter and no penalty could follow for a clerical error.
Where tax was admittedly deposited for the correct quarter but the challan mistakenly recorded an earlier period, the Delhi HC held that the clerical error could be corrected by judicial direction to reflect the actual tax period. Requiring refund and fresh deposit was treated as an unnecessary procedural exercise because the liability for the relevant quarter had already been discharged. The Court also held that no penalty could follow on that basis, since the statutory default of non-filing by the due date was not present. The quarterly returns were therefore directed to be accepted on the basis of the corrected challan entry.
Issues: (i) Whether the tax period mentioned in a challan could be corrected by judicial direction where the payment was admittedly made for the correct quarter but the challan reflected an inadvertent wrong period; (ii) whether the petitioner could be directed to pursue refund and fresh deposit, or whether acceptance of the returns for the correct quarter should follow without exposing it to penalty.
Issue (i): Whether the tax period mentioned in a challan could be corrected by judicial direction where the payment was admittedly made for the correct quarter but the challan reflected an inadvertent wrong period.
Analysis: The payment had been made for the relevant quarter, but the challan carried the earlier period by mistake. Requiring the petitioner to first seek refund and then redeposit the same amount for the correct quarter would create an avoidable and cumbersome procedure. The Court found that the error was inadvertent and bona fide, and that the petitioner had already discharged the tax liability for the relevant period. In such circumstances, a writ direction was appropriate to align the challan entry with the actual tax period for which the deposit had been made.
Conclusion: The period mentioned in the challan was directed to be read as the correct period, i.e. 01.08.2016 to 31.08.2016.
Issue (ii): Whether the petitioner could be directed to pursue refund and fresh deposit, or whether acceptance of the returns for the correct quarter should follow without exposing it to penalty.
Analysis: The alternative course suggested by the Revenue would have required refund proceedings, fresh deposit and the possibility of penalty under Section 86(9) of the Delhi Value Added Tax Act, 2004. Penalty under that provision is attracted where returns are not furnished by the due date, which was not the factual position here. Since the tax for the relevant quarter had already been deposited and the only mistake was in the challan description, the Court held that the petitioner should not be saddled with penalty or sent through a redundant procedural cycle. Once the challan period was corrected, the returns for the corresponding quarter had to be accepted.
Conclusion: The returns for the 2nd quarter of 2016-2017 were directed to be accepted and no penalty was to follow on account of the clerical error in the challan.
Final Conclusion: Relief was granted by correcting the challan entry and ensuring that the petitioner's quarterly returns were accepted on the basis of the tax already deposited, without resort to refund and redeposit machinery.
Ratio Decidendi: Where tax is admittedly deposited for the correct period but a challan mistakenly records a different period, the error may be corrected by mandamus and the assessee should not be compelled to undergo refund and redeposit proceedings or suffer penalty where the statutory default is not of non-filing by the due date.