GST Appellate Tribunal Orders Refund of Penalty to SEL Jegat Printers
The GST Appellate Tribunal has ruled in favor of SEL Jegat Printers, ordering a refund of a penalty related to a clerical omission in an e-way bill.
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The Bengaluru Bench of the GST Appellate Tribunal (GSTAT) has ordered the refund of a ₹2,04,372 penalty imposed on SEL Jegat Printers Private Limited, following a case involving a missing Part-B of an e-way bill. The penalty was originally confirmed under Section 129(1)(a) of the Central Goods and Services Tax Act (CGST Act) after the vehicle carrying customized self-adhesive labels for The Himalaya Drug Company was intercepted on September 19, 2018.
The goods were accompanied by genuine tax invoices and Part-A of the e-way bill was generated; however, Part-B, which contains details about the vehicle and transit, was not filled out. To secure the release of the detained vehicle, the company paid ₹4,08,744 on September 20, 2018, which included both integrated tax and an equivalent penalty.
In its appeal, the company argued that the omission of Part-B was merely clerical and that the labels were manufactured exclusively for the consignee, thereby lacking marketability to third parties and eliminating any intent to evade tax. The Revenue contended that the completion of Part-B was mandatory and that failure to do so warranted civil liability, irrespective of intent.
The Tribunal ruled that a technical omission should not justify a 100% penalty without clear evidence of an intent to evade tax. It emphasized that the underlying transaction was transparent, taxes were duly paid, and there was no indication of fraudulent intent. The GSTAT referenced previous decisions which advocate for a proportionality principle in tax enforcement, contrasting with the Revenue’s approach that treated the omission as grounds for severe penalties.
The Tribunal also found that the enforcement authorities had failed to issue the mandatory final speaking order in Form GST MOV-09, which bypassed necessary adjudication safeguards and prejudiced the statutory rights of the appellant. Consequently, the Tribunal set aside the original order from March 7, 2020, and directed the refund of the penalty within four weeks of receiving its order.
