GST penalty quashed for PIN code mismatch between tax invoices and E-Way Bill under Section 129(5)

The Madras HC quashed a penalty imposed under Section 129(5) of the GST Act for discrepancy between PIN codes in tax invoices and E-Way Bill. The court held that minor discrepancies in addresses between head office and actual dispatch location, where the petitioner had valid VAT registration for the dispatch address, constituted only technical breach not warranting penalty. The court noted GST philosophy opposes unjust tax burden on compliant taxpayers. The respondent was directed to refund the penalty amount or allow credit adjustment against future tax liability.

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Issues:
Challenge to penalty imposed on consignment due to discrepancy in PIN code in Tax Invoices and E-Way Bill.

Analysis:
The petitioner challenged the penalty imposed on the consignment due to a discrepancy in the PIN code between the Tax Invoices and the E-Way Bill. The Circular No.64/38/2018-GST issued by the Central Board of Indirect Taxes and Customs was cited, which stated that proceedings under Section 129 of the CGST Act may not be initiated in certain situations, including errors in the PIN code but correct consignor and consignee addresses. The petitioner argued that the penalty was unjustified as it was imposed prior to the issuance of the circular. Additionally, it was highlighted that the address in the E-Way Bill matched the VAT registration obtained under the Karnataka VAT Rules, indicating a minor discrepancy in the PIN code.

The respondent contended that the petitioner had voluntarily paid the penalty and the matter was concluded as per Section 129(5) of the respective GST enactments. The respondent also referred to a decision by the High Court of Allahabad, emphasizing that delays in challenging such orders could be barred by laches, especially when the penalty had been paid. The respondent suggested that the petitioner could file a statutory appeal if necessary.

The court considered the submissions from both parties, reviewed the Circular No.64/38/2018-GST, and noted the minor discrepancy in the PIN code and address details. It was observed that the difference in addresses was due to the petitioner having a separate office for invoicing and a different location for dispatching goods. The court opined that imposing a penalty for such technical breaches or minor discrepancies would not be justified under Section 129(5) of the respective GST enactments. The court quashed the impugned order and directed the respondent to refund the penalty amount to the petitioner or allow credit for future tax liabilities.

In conclusion, the court ruled in favor of the petitioner, considering the minor nature of the discrepancy and the philosophy of not burdening compliant taxpayers with unjust penalties. The judgment highlighted the importance of ensuring fairness in tax enforcement and compliance while addressing technical violations.

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