Tvl. Tm Steel vs. The Deputy State Tax Officer

Facts

The petitioner, Tvl.T M Steel, is challenging a notice in Form GST MOV 07 dated July 24, 2023, issued by the Deputy State Tax Officer, Roving Squad Team IV, Trichy. The petitioner manufactures TMT steel and iron bars and had received an order from Mr. T. Balaji (HUF). The petitioner placed an order with M/s. Rashmi Mataliks Limited in West Bengal to supply the consignment directly to Mr. T. Balaji in Tuticorin. M/s. Rashmi Mataliks Limited issued an e-invoice and e-way bill. However, in the "Billed To" and "Shipped To" columns of the invoice, the name "Tvl.T.M.Steel" was erroneously mentioned instead of "Tvl.T.Balaji" in the "Shipped To" column. The respondent detained the vehicle and consignment based on this discrepancy. The petitioner contends that this was a typographical error by M/s. Rashmi Mataliks Limited and not their fault.

Held

The Court held that the error in the "Shipped To" column, where "Tvl.T.M.Steel" was mentioned instead of "Tvl.T.Balaji", while the correct address of Tvl.T.Balaji was clearly stated in the address column, constituted a typographical error. The Court found that the mistake was committed by M/s. Rashmi Mataliks Limited and not by the petitioner. The Court also noted that the respondent had not communicated with M/s. Rashmi Mataliks Limited in West Bengal to address the error. Additionally, the Court found a clear violation of Section 129(3) of the CGST Act, as the respondent failed to pass an order within 7 days of serving the notice. Consequently, the Court modified the impugned penalty order by directing the petitioner to pay a penalty of Rs. 5,000/-. Upon payment, the respondent was directed to release the goods. The petitioner was granted liberty to challenge the modified penalty before the appropriate authorities. The authorities were also directed to intimate the mistake to their counterparts in West Bengal for appropriate action against M/s. Rashmi Mataliks Limited.

Key Issues

1. Whether the detention of the vehicle and consignment is illegal and arbitrary due to a typographical error in the invoice, and whether the respondent acted without jurisdiction by penalizing the petitioner for a mistake not committed by them? (Section 129 of the CGST Act, 2017) 2. Whether the respondent violated the procedural requirement of passing an order within 7 days from the date of service of notice as stipulated under Section 129(3) of the CGST Act, 2017? Petitioner's arguments: The petitioner argued that the error in the "Shipped To" column was a mere typographical mistake by M/s. Rashmi Mataliks Limited, and the petitioner should not be penalized for it. They also contended that the respondent failed to communicate with the counterpart authority in West Bengal to address the error at its source. Furthermore, the petitioner argued that the respondent violated Section 129(3) of the CGST Act by failing to pass an order within the prescribed 7-day period after the detention notice. Respondent's arguments: The respondent argued that the mention of Tvl.T.M.Steel in the "Shipped To" column, along with the absence of the petitioner's GST number, indicated that it was not a simple typographical error and opposed the petitioner's contention.