The Allahabad High Court quashed penalty order against Hawkins Cookers, quoting the famous words from Chanakya’s Arthashastra that “Governments should collect taxes like a honeybee collects honey from a flower without disturbing its petals”.
The petitioner had purchased the raw materials for manufacturing of pressure cookers in the month of January 2020, from various suppliers situated in Maharashtra. Petitioner, thereafter, stock transferred certain raw materials from Maharashtra, for being delivered to its factory. In the 4 E-Way bills, the place of supply has been wrongly mentioned to be the principal place of business of the petitioner situated at Kanpur, where no manufacturing is done.
The reason for the aforesaid mistake having been done by some of the parties is that on filling the GSTIN ( registration number ) of the petitioner while generating the E-Way bill, the principal place of business is automatically reflected in the place of supply ( which is auto populated ).
The counsel for the petitioner submitted that the addresses that were wrongly written in the four e-way bills were addresses of the registered office of the petitioner and that the same was a technical error only as there was no intention of the petitioner to hide the destination in the e-way bills.
In fact, it was submitted that all the invoices and the bilties that were accompanying the goods bear the correct address of destination that is Jaunpur. The mistake committed in the four e-way bills with regard to mentioning of the registered office of the petitioner can only be seen as a clerical and typographical error and nothing more.
A Single Bench of Justice Shekhar B. Saraf observed that “In the present case, it is palpably clear that the goods were accompanied with the relevant invoices, bilty documents and the e-way bills. It is to be noted that the invoices and bilty documents also contain the correct address of the destination and only four out of eight of the e-way bills had the incorrect address. Even this incorrect address was the registered office of the petitioner. In such a case, no presumption to evade tax arises at all. The mere technical error committed by the petitioner cannot result in imposition of such harsh penalty upon the petitioner.”
“In the light of the above, I am of the view that the penalty imposed in this particular case is without any basis in law, and accordingly, impugned penalty order dated February 14, 2020 and the order passed in appeal dated October 13, 2020 are quashed and set aside” the Court concluded.
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