Incorrect GSTIN In Delivery Challan Alone Cannot Attract Penalty: GSTAT Thiruvananthapuram

The Thiruvananthapuram Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) on 30 October held that an incorrect GSTIN mentioned in a delivery challan due to a genuine clerical error cannot, by itself, justify a penalty when no evidence establishes a connection between the taxpayer, supplier or transporter and the GSTIN holder.

A Bench comprising Vice-President Subramanya Rayaprol and Technical Member Ramamoorthi Sriram allowed the appeal filed by Kurian Abraham Pvt. Ltd. and set aside the penalty of Rs. 38,556 imposed under Section 129 of the Central Goods and Services Tax (CGST)/Kerala Goods and Services Tax (KGST) Act. It said:

“...We find that the transporter was carrying a proper delivery challan required as per Rules. Therefore, we find that the conditions of the said Notification No. 3/2018-State Tax was satisfied and the transport of such goods from the agriculturist-premises to the appellant's place was exempt from the requirement of the e-way bill irrespective of the value of the goods. Therefore, the detention and imposition of penalty against the appellant is unsustainable.”

The case arose after the department intercepted a vehicle carrying 7,560 kg of natural rubber latex, valued at Rs. 3,85,560, on 4 January 2022. The goods were detained on the ground that they were being transported without an e-way bill.

Kurian Abraham submitted that the rubber latex had been supplied by Arun Scaria, an agriculturist who was not required to obtain GST registration. It relied on Notification No. 3/2018-State Tax dated 14 May 2018, which exempts the transportation of rubber latex from an agriculturist's premises to a registered dealer within Kerala from the e-way bill requirement, irrespective of the value of the goods, subject to prescribed documentation.

It explained that the delivery challan had been prepared on behalf of the agriculturist and that the GSTIN of another dealer, Anku Rubbers, had been inadvertently mentioned. The supplier also filed an affidavit confirming that he was an agriculturist and had directly supplied the rubber latex to Kurian Abraham.

The Tribunal noted that Anku Rubbers had denied any connection with the transaction. It found no evidence linking Kurian Abraham, the supplier or the transporter to the GSTIN holder.

It found that the conditions prescribed under Notification No. 3/2018-State Tax had been satisfied, as the goods were transported from the agriculturist's premises to the registered dealer's premises under the prescribed delivery challan. The transportation was, therefore, exempt from the e-way bill requirement, irrespective of the value of the goods.

On the incorrect GSTIN, the Bench observed that the error appeared to be genuine and could be condoned in the absence of evidence connecting the parties to the GSTIN holder. It said:

“...the mentioning of the GSTIN of some other person appears to be a genuine mistake as there is no evidence to show that the appellant or their supplier or the transporter was in any way related to such GSTIN holder. Such mistakes are condonable and we condone the same, with a suggestion to the appellant to refrain from making such avoidable mistakes which unnecessarily creates doubts in the minds of the Tax authorities.”

Accordingly, the GSTAT set aside the penalty and allowed the appeal with consequential relief.

For Appellant: Advocate Iype John

For Respondent: Mansur M.I., authorised representative