2023 (11) TMI 144 - HC - VAT and Sales Tax

Levy of penalty under Section 51(7)(b) of PVAT Act - deficiency in the documents with regard to correct name and address of consignee, despite the fact that documents were produced voluntarily at the ICC, which rules out any evasion of tax - HELD THAT - The Tribunal while dismissing the appeal of the appellant observed that all previous transactions running into crores had correctly been entered at Mohali. However, it was held that this fact could not absolve the appellant from producing true and correct invoice pertaining to the current transaction - the findings so given by the Tribunal are liable to be set aside, as it was merely a clerical mistake, that only the name of the consignee was wrongly mentioned while picking the name of the appellant from drop-down menu in the software used by the Noida Head Office of the appellant. Futher, it is not being disputed that the Dehradun Branch in whose favour, the invoice was mistakenly generated, does not deal with the goods, which were being transported, vide invoice No. 157. Penalty can be imposed to evade tax and not for bona fide mistake. The driver in the present case voluntarily reported the goods at ICC Jharmari for generating necessary information and goods were accompanied by all the necessary documents. The substantial questions of law are answered in favour of the appellant and against the revenue, as penalty cannot be imposed upon the appellant on account of a clerical mistake - The appeal stands allowed.

Summary

Issues:
The judgment involves the setting aside of an order passed by the Tribunal under Section 68 of the Punjab Value Added Tax Act, 2005, regarding a penalty imposed on the appellant for deficiency in documents related to the correct name and address of the consignee.

Summary:

Background:
The appellant, a registered dealer under the Punjab VAT Act and the Central Sales Tax Act, was involved in manufacturing and selling CFL and Color television for different companies. The issue arose when a consignment was detained due to a clerical mistake in the address of the consignee on the invoice.

Legal Proceedings:
The detaining officer imposed a penalty under section 51(7)(b) of the PVAT Act, which was upheld by the Appellate Authority and the Tribunal. The appellant contended that the mistake was clerical and there was no intention to evade tax, as all necessary documents were voluntarily produced at the checkpoint.

Court's Decision:
The High Court found in favor of the appellant, citing a similar case where a clerical error was considered a genuine mistake and not an attempt to evade tax. The Court emphasized that penalty should not be imposed for a bona fide mistake, especially when all relevant documents were provided voluntarily. The Tribunal's decision to uphold the penalty was overturned, and the appellant's appeal was allowed.

Conclusion:
The Court ruled that the penalty imposed on the appellant was unjustified, as the mistake was clerical and not an attempt to evade tax. The judgment set aside the Tribunal's order and favored the appellant in this case, emphasizing the importance of considering the circumstances and intent behind such errors in tax-related matters.