2024 (8) TMI 72 - HC - GST

Levy of penalty u/s 129(5) of GST Act - discrepancy between the PIN code of the petitioner in the Tax Invoices and in the E-Way Bill - HELD THAT - Having considered the documents filed by the petitioner and having considered the Circular Circular No.64/38/2018-GST dated 14.09.2018 issued by the Central Board of Indirect Taxes and Customs the content the Court is of the view that the petitioner cannot be mulcted with unjust penalty due to a minor discrepancy in the PIN code in the GST Registration and the Tax Invoices is to be construed as a minor violation of the provisions of respective GST enactments. It is noticed that the difference in the address given in the E-Way Bill and the address in the Tax Invoices are only on account of the difference in the Head Office and the actual place from which the delivery was made. The petitioner had earlier obtained registration under VAT Act for the place from where the despatch was made. The Tax Invoices that has been raised by the petitioner is from the same address at earlier obtained registration from VAT Authority. The imposition of penalty for technical venial breach of the provisions or the minor discrepancy in the variance in the address in the Tax Invoices and the E-Way Bill would not justify the penalty under Section 129(5) of the respective GST enactments. Although the petitioner has come long after the impugned order was passed the Court is of the view that the philosophy under the respective GST enactments is not to levy unjust tax and burden on assessee who is otherwise regular in paying tax and complies with the law. The impugned order passed by the respondent is quashed. In view of this order the respondent is directed to either refund the amount paid by the petitioner or allow the petitioner to take credit in their Electronic Cash Register or Electronic Cash for adjustment towards future tax liablity of the petitioner - Petition disposed off.

Summary

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.