Invoice-wise penalty under VAT law: each defective tax invoice is a separate default, not one combined breach.

The Jammu & Kashmir Value Added Tax Act, 2005 treats sale invoices as transaction-specific, so the obligation under section 59 and Rule 63 applies separately to each sale. A defective or false invoice falls within the default described in section 69(1)(k), and the penalty under section 69(1)(xi) is linked to each such default with reference to the tax payable on that individual transaction, subject to the minimum penalty. On that scheme, multiple improper invoices detected on the same day are not merged into one default; each defective invoice is assessed separately for penalty purposes.

---

---

Issues: Whether 35 improper invoices issued on the same day constitute a single default for the purposes of penalty under section 69(1)(k) of the Jammu & Kashmir Value Added Tax Act, 2005, or whether each invoice gives rise to a separate default attracting penalty under section 69(1)(xi).

Analysis: The statutory scheme of the Jammu & Kashmir Value Added Tax Act, 2005 treats sale, tax invoice and retail invoice as transaction-specific concepts. Section 59 and Rule 63 require issuance of the relevant invoice for each sale transaction, and section 69(1)(k) treats failure to issue a tax invoice or retail invoice, or issuance of a false invoice, as a distinct default. The penalty provision in section 69(1)(xi) is linked to the default under clause (k) and is computed with reference to the tax payable on each such default, with an alternative minimum penalty of Rs. 10,000/-. The relevant unit for penalty is therefore the individual invoice-based transaction, not the calendar day on which multiple invoices were detected.

Conclusion: The answer is against the view that all 35 invoices formed a single default. Each improper invoice constitutes a separate default, and penalty is to be determined invoice-wise under section 69(1)(xi).

Final Conclusion: The reference is answered by holding that the penalty regime applies separately to each defective invoice and cannot be compressed into one default merely because the invoices were found on the same day.

Ratio Decidendi: Where the statutory default is tied to issuance or non-issuance of a tax invoice for a particular sale transaction, each defective invoice constitutes an independent default and penalty must be assessed with reference to that individual default.

---