Patna High Court: In a case wherein a writ petition was filed by Ceat Ltd. against the penalty order passed under Section 60(4)(b) read with Section 56(4)(b) of the Bihar Value Added Tax Act, 2005 (‘the Act’), after detention of a truck carrying goods at the integrated check-post, the Division Bench of K. Vinod Chandran, CJ.* and Rajiv Roy, J., dismissed the petition in absence of ground for interference with imposed penalty and opined that the penalty was imposable under the Act on account of clerical mistake in mentioning of invoice number in SUVIDHA Outgoing form (‘the form’).
Background
Petitioner engaged in the manufacture and sale of tyre, tubes and flaps had a warehouse situated at Patna and other branch warehouses in nearby state, one of which was situated at Ranchi, Jharkhand. Petitioner contented that by invoice it was indicated that stock transfer was made to the warehouse at Ranchi and while the same was being transported in a vehicle, it was detained and checked at the integrated check-post. The driver produced the invoice, the receipt and the form which had to be uploaded before the transport originated but was produced on probable checking. The form produced had different invoice number and upon tallying it was found that the invoice number was wrongly mentioned as ‘002179’ instead of ‘002172’, which was contended to be a clerical mistake. However, the detaining authority imposed maximum penalty prescribed under Section 60(4) of the Act. It was submitted that there was no mens rea as everything tallied but the invoice number, which was also due to human error, had to be reckoned by the detaining authority.
Analysis, Law, and Decision
The Court took note of the documents produced by the petitioner and opined that it did not prove genuineness of the transport. The detention was done in early hours of 02-01-2015 and the invoice with the supporting documents were generated after the detention which indicated that it was done after the knowledge of detention at check-post and mistake in the invoice number as revealed from the form was noticed by the check-post authority.
The Court further noted that the invoices were serially numbered and there was no evidence to show the last serial number of the invoice on the day on which the transport commenced. The identity in value was evident from the invoice and the form but the quantity in the notice was handwritten and not by the authorized signatory.
For determination of importance of existence of mens rea for penalty imposed, the Court relied on Guljag Industries v. CTO, (2007) 7 SCC 269 (‘Guljag Industries Case’), where it was held that the presumption was rebuttable on the assessee on production of the requisite documents, if by mistake some of the documents were not available at the time of checking. It was also held in Guljag Industries Case (supra) that once the ingredient of Section 78(5) of the Act was established then there would be no reduction in the amount of penalty, or it would be waived. Thus, the Court opined that in the present case there was a mistake in the invoice number which arose a reasonable ground of attempt to carry out multiple transport, since, in absence of checking at the check-post, there could have been further transport made under the same invoice.
The Court further opined that Section 60(4) of the Act enabled the seizure of the goods along with the carrier in case the authority had suspicion that the transportation was not in accordance with Section 60(2) of the Act. The Court also opined that 60(4)(b) of the Act made Section 56 of the Act applicable mutatis mutandis. Thus, the Court held that penalty was imposable under Section 56(4)(b) of the Act if the person in charge of the goods failed to satisfy the officer regarding the proper accounting of goods.
The Court held that the ingredients of Section 60(4)(b) read with Section 56(4)(b) of the Act was established and there was no reason to interfere with the imposed penalty.
[Ceat Ltd. v. State of Bihar, 2023 SCC OnLine Pat 6405, decided on 28-11-2023]
*Judgment authored by: Chief Justice K. Vinod Chandran
Advocates who appeared in this case :
For the Petitioner: S. D. Sanjay, Senior Advocate; Parul Prasad and Priya Gupta, Advocates
For the Respondents: Vikash Kumar, SC-11
