Wrong statutory provision in GST penalty order led to quashing where the substantive consequence showed a materially different penalty.

An order cannot be sustained as a mere wrong-citation error where its substantive effect shows application of the wrong GST penalty provision with materially different consequences. The HC held that although a mistaken reference to a statutory section alone may not invalidate proceedings, imposition of 100% penalty under Section 74, when the case should have proceeded under Section 74A with a 50% penalty consequence, showed that the authority acted under the incorrect provision. The impugned order was quashed, and fresh proceedings were permitted in accordance with law under Section 74A.

---

---

Issues: Whether an order imposing 100% penalty under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 could be sustained when the proceedings, on the petitioner's case, ought to have been under Section 74A of that Act.

Analysis: A mere mistaken reference to the wrong provision does not by itself vitiate proceedings. However, the impugned order reflected application of Section 74 by imposing penalty at 100%, whereas proceedings under Section 74A would attract only 50% penalty. On that basis, the error was not treated as a simple inadvertent mention of the wrong section.

Conclusion: The impugned order was quashed, and fresh proceedings were permitted to be initiated in accordance with law under Section 74A of the Tamil Nadu Goods and Services Tax Act, 2017.

Ratio Decidendi: Where the substantive consequence of an order shows that the authority acted under an incorrect statutory provision with materially different consequences, the proceedings cannot be upheld as a mere clerical or inadvertent citation error.

---