Goods and vehicle seizure overturned due to inadvertent invoice number omission without tax evasion intent

The HC allowed the petition involving seizure of goods and vehicle where petitioner had omitted alphabetical figures from invoice number, referring only to "235" instead of "SAI/V235". The State cited Achal Industries v. State of Karnataka regarding economic superiority in tax matters, but the court distinguished this case as involving a charging section interpretation rather than penal consequences. The court found the omission was inadvertent human error without intent to evade tax, as invoice number 235 was consistently maintained in all documentation. The error fell within Clause 5 of the 14th September 2018 Circular, making the penalty pardonable.

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Issues:
Challenge to order under Section 129 of GST Act imposing penalty.

Analysis:
1. The petitioner challenged an order dated 20th August, 2019, passed under Section 129 of the Goods and Services Tax Act, imposing a penalty of Rs. 6,84,000. The contention was that a minor error in the invoice number should not lead to such a penalty as other details in the invoice were correct.

2. The petitioner argued that the inadvertent error in mentioning the invoice number as "235" instead of "SAI/V/235" should not attract a penalty as it was not intended to deceive the revenue authorities. The petitioner maintained that all other details in the invoice were accurate and the error was unintentional.

3. An appeal was filed against the order, but the appellate authority upheld the penalty citing the discrepancy in the invoice number. The petitioner relied on Circular No. 64//38/2018-GST, which allowed overlooking minor discrepancies in way bills or tax invoices before invoking penalties under Section 129.

4. The court analyzed the Circular and held that the error in the invoice number, considering all other correct details, fell within the exception provided in Clause 5 of the Circular. The court emphasized that the error was not deliberate and did not aim to defraud the state revenue.

5. Reference was made to a Supreme Court judgment highlighting the strict interpretation of taxation statutes, especially in penal cases. The court concluded that the penalty imposed due to the inadvertent human error in the invoice number was pardonable under the Circular.

6. Consequently, the court allowed the writ petition, quashing the orders imposing the penalty. The petitioner's request for the refunded penalty amount was also granted in light of the judgment allowing the writ petition.

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