Bona fide clerical error in invoice details cannot sustain penalty absent any indication of tax evasion.

Penalty for defective transport documents was not sustainable where the invoice showed a wrong consignee name and address due to a bona fide clerical error, the goods were in fact meant for the Mohali branch, and the driver voluntarily produced the consignment with documents at the ICC. The HC held that the discrepancy did not indicate tax evasion, and penalty under the VAT law is attracted only where evasion is shown. The penalty was therefore set aside.

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Issues: Whether penalty under Section 51(7)(b) of the Punjab Value Added Tax Act, 2005 was sustainable when the invoice carried a wrong consignee name and address because of a clerical error, but the goods and documents were voluntarily produced at the ICC and there was no material indicating tax evasion.

Analysis: The discrepancy in the invoice was held to be a bona fide clerical mistake arising from the selection of the wrong consignee from the software drop-down menu. The goods were not disputed to be meant for the Mohali branch, the Dehradun branch had no concern with the goods, and the driver had voluntarily reported the consignment at the ICC with the relevant documents. In these circumstances, the Tribunal's view that the defective invoice justified penalty was found unsustainable, because penalty under the VAT law is attracted for evasion and not for an inadvertent and explainable mistake.

Conclusion: The issue was decided in favour of the assessee. The penalty was held to be unjustified and was set aside.

Ratio Decidendi: A penalty for defective transport documents cannot be sustained where the discrepancy is a bona fide clerical error and the surrounding facts negate any intention to evade tax.

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