The GST Appellate Tribunal (GSTAT), Lucknow Bench, has allowed a Revenue appeal and restored the tax and penalty imposed under Section 129(3) of the Uttar Pradesh GST Act, 2017, holding that transportation of taxable goods without the mandatory E-Way Bill, coupled with the surrounding circumstances and repeated non-compliance, established an intention to evade tax.

The Bench of Santosh Kumar Srivastava (Judicial Member) and Arvind Kumar (Technical  Member) observed that the E-Way Bill forms an integral part of the statutory mechanism for monitoring the movement of taxable goods. In the present case, there was no dispute that the goods were being transported without an E-Way Bill at the time of interception.

According to the order, 132.90 cubic feet of iron goods were being transported under Tax Invoice No. 29 dated March 26, 2018. The vehicle was intercepted by the Mobile Squad on March 27, 2018, when no E-Way Bill was available with the driver.

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The proper officer subsequently imposed tax of ₹47,844 along with an equivalent penalty of ₹47,844 under Section 129(3) of the UPGST Act, 2017.

The first appellate authority, however, had set aside the tax and penalty through its order dated September 24, 2021. The Revenue challenged that decision before the GST Appellate Tribunal.

A central issue before the GSTAT was whether the goods were genuinely being transported and the alleged intention to evade tax was merely a presumption, particularly when the taxpayer subsequently produced the E-Way Bill and other documents.

The first appellate authority had relied upon various judicial precedents where courts had granted relief in cases involving subsequent production of an E-Way Bill or where there was no discrepancy in the accompanying documents.

The Tribunal, however, found that those decisions were distinguishable on the facts of the present case.

It noted that the E-Way Bill is generated through an online process, whereas the tax invoice is issued manually. According to the Tribunal, the failure to generate the E-Way Bill could therefore leave scope for subsequent manipulation of the books of account.

The GSTAT emphasized that carrying an E-Way Bill during transportation is a mandatory statutory requirement under Rule 138 of the GST Rules.

The Tribunal therefore rejected the argument that subsequent production of documents could, by itself, cure the statutory violation committed at the time the goods were being transported.

The Tribunal also attached significance to the circumstances surrounding the transportation.

The goods were shown to have been loaded at Baheri, Bareilly, in Uttar Pradesh, while their delivery was shown at Kichha in Uttarakhand. The Tribunal noted that the distance between Baheri and Kichha was approximately 25 kilometres and that Baheri is situated close to Uttarakhand.

The Revenue had argued that transportation of sensitive goods such as iron scrap without an E-Way Bill, particularly when the vehicle was actually intercepted during transit, indicated an intention to evade tax.

The GSTAT accepted this cumulative assessment of circumstances. It held that the absence of an E-Way Bill could not be viewed in isolation from the interception, nature of the goods, route of transportation and other surrounding facts.

An important factor considered by the Tribunal was the alleged repetition of the same mode of operation.

The order refers to an earlier GSTAT Lucknow Bench decision dated August 20, 2026, in Om Prakash v. M/s Islam Trading Company, involving goods of a similar nature, transportation to the same location and an E-Way Bill produced only after interception by the Mobile Squad, Bareilly.

The Tribunal noted the similarity in the modus operandi and took into account the repetition of the lapse.

According to the GSTAT, the subsequent production of the E-Way Bill after interception, coupled with the repeated adoption of the same procedure, meant that the conduct could not be treated as a mere procedural or technical lapse.

The Tribunal ultimately concluded that the circumstances demonstrated a deliberate course of conduct indicative of an intention to evade tax.

It held that transportation of the goods without an E-Way Bill constituted substantive non-compliance with the GST Rules. The Tribunal further observed that the first appellate authority had erred in interfering with the order passed under Section 129(3) of the UPGST Act.

The GSTAT also distinguished the judicial precedents relied upon by the first appellate authority, noting that the factual circumstances in those cases were different from the present matter.

The GSTAT accordingly allowed the appeal filed by the department.

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