Hawkins Cookers Ltd (“the Petitioner”) is engaged in the business of manufacturing and selling pressure cookers under the brand name Hawkins. The Petitioner purchased/transferred stock of various parts/raw materials for manufacturing of pressure cooker from outside the state of UP where the Petitioner factory is located.
The Allahabad High Court recently made a decision in the case of Hawkins Cookers Ltd. versus the State of Uttar Pradesh. They ruled that making small mistakes like typos or clerical errors on an e-way bill shouldn’t lead to penalties, especially if most of the required documents are provided with the goods.
Here’s what happened:
Hawkins Cookers Ltd., a company known for making pressure cookers, bought or moved materials from outside Uttar Pradesh to use in their factory there. When the suppliers sent the goods, they issued e-way bills. Out of 8 bills, only 4 had the correct destination mentioned. Because of this, the Revenue Department fined Hawkins Cookers Ltd. in February 2020.
Hawkins Cookers Ltd. wasn’t happy with this decision. They argued that the mistakes were minor and unintentional.
The main question was whether these small errors on the e-way bills could really justify penalties.
The court said:
- Penalties under the Central Goods and Services Tax Act can only be imposed if there’s proof of trying to avoid paying taxes. If the required documents are provided, it shows there was no intention to dodge taxes.
- If there’s a typo or a clerical mistake on an e-way bill, but all the other necessary documents are there, it’s unfair to assume there was an attempt to avoid taxes.
- They emphasized that punishing Hawkins Cookers Ltd. for such minor errors wouldn’t be fair. So, they decided to cancel the penalties imposed by the Revenue Department.
In conclusion, the court ruled in favor of Hawkins Cookers Ltd., stating that the penalties imposed were unjustified.