The Goods and Services Tax Appellate Tribunal (GSTAT) has upheld a penalty of ₹4.09 lakh imposed under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017, after TMT bars were found being transported in a vehicle different from the one mentioned in the accompanying e-way bill.
The Tribunal held that once the original movement of goods had concluded, any subsequent movement was required to be supported by a separate and valid documentary trail. Where the vehicle carrying the goods was changed, the particulars in Part-B of the e-way bill were required to be updated to correspond with the vehicle actually transporting the consignment.
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A Division Bench comprising Judicial Member Santosh Kumar Srivastava and Technical Member Arvind Kumar observed that an unexplained discrepancy between the vehicle mentioned in the e-way bill and the vehicle intercepted by the GST authorities could not, in the facts of the case, be characterised as a minor or technical lapse.
“In the facts and circumstances of the case, and in the absence of satisfactory evidence explaining the change of vehicle, the discrepancy gives rise to a reasonable inference of an intention to evade tax,” the Tribunal observed.
The appeal arose from an Order-in-Appeal dated August 28, 2023, by which the first appellate authority had rejected the taxpayer’s challenge to proceedings initiated under Section 129 of the UPGST Act.
The authorities had imposed a total penalty of ₹4,09,854, comprising ₹2,04,927 under the Central Goods and Services Tax component and an equivalent amount under the State Goods and Services Tax component.
The dispute concerned the transportation of TMT bars covered by Invoice No. 61 dated August 23, 2023. The invoice was issued by the appellant to M/s Ambrosial India.
The consignment was accompanied by E-Way Bill No. 431363370961, in which vehicle number UP 82 T 2315 was mentioned. However, when the goods were intercepted by the Mobile Squad, they were found being transported in vehicle number UP 44 BT 5284.
Part-B of the e-way bill had not been updated to reflect the vehicle actually carrying the goods.
The taxpayer explained that Ambrosial India had placed a purchase order dated August 14, 2023, for 60 metric tonnes of ESL-brand TMT bars. According to it, the order was fulfilled through two separate and independent transactions.
The first transaction was allegedly completed on August 17, 2023, under a valid tax invoice and e-way bill, and the goods were delivered to the purchaser.
The second transaction involved 21.28 metric tonnes of 8 mm TMT bars dispatched on August 23, 2023, under Invoice No. 61 and the relevant e-way bill. The goods were initially transported through vehicle number UP 82 T 2315 and allegedly reached the purchaser’s premises on the same day.
According to the taxpayer, the purchaser thereafter decided to shift the goods to the premises of another group company. The vehicle originally carrying the goods allegedly broke down, following which the consignment was transferred to vehicle number UP 44 BT 5284.
It was further claimed that the purchaser generated a fresh e-way bill in connection with the subsequent sale of the goods to M/s Eiffel Infra Developers Private Limited. However, the number of the earlier vehicle was inadvertently entered in that e-way bill.
The replacement vehicle was subsequently intercepted without an e-way bill corresponding to the vehicle actually carrying the goods, resulting in the initiation of proceedings under Section 129.
The taxpayer argued that the discrepancy in the vehicle number arose solely because the original vehicle had broken down and had to be replaced. It maintained that the goods remained the same and that there was no actual discrepancy in the quantity transported.
It also contended that the movement detected by the authorities occurred after the goods had already been delivered to and accepted by the purchaser. Consequently, the taxpayer claimed that it had no control over either the subsequent transportation or the e-way bill generated for that movement.
The taxpayer further alleged that the authorities had incorrectly relied on the gross weight of the vehicle without appreciating that the vehicle had been changed. It maintained that two independent transactions had wrongly been clubbed together.
It was also pointed out that there was no allegation of a fake invoice, undervaluation, suppression of turnover or any actual loss of revenue. On that basis, the taxpayer argued that proceedings under Section 129 were not sustainable.
The State tax authorities, however, submitted that the vehicle carrying the goods at the time of interception was different from the vehicle mentioned in the relevant e-way bill.
They also contended that the explanation concerning the breakdown of the original vehicle was unsupported by any documentary evidence produced at the time of interception.
The Tribunal found that Invoice was accompanied by an e-way bill mentioning vehicle number UP 82 T 2315, while the goods were actually found in vehicle number UP 44 BT 5284.
It consequently held that no valid e-way bill corresponding to the vehicle actually transporting the goods had been generated, even though the value of the consignment exceeded the statutory threshold of ₹50,000.
The Tribunal also noted a discrepancy in the weight of the goods.
According to the freight-related document produced by the taxpayer, the gross weight of vehicle number UP 82 T 2315 was declared as 33,645 kilograms, while the net weight of the goods was stated to be 21,280 kilograms.
On the other hand, when the intercepted vehicle was weighed and its unladen weight was deducted, the weight of the goods came to approximately 20,220 kilograms. This differed from the declared quantity of 21.28 metric tonnes mentioned in the invoice.
The penalty was imposed on account of these discrepancies. The amount was deposited, following which the goods were released.
The Tribunal accepted, as a general proposition, that a completed supply and a subsequent movement of the same goods could constitute separate commercial events.
However, it held that this proposition did not assist the taxpayer because the invoice and other documents relating to its transaction were found with the goods without any updated or new e-way bill corresponding to the vehicle actually transporting them.
The e-way bill produced by the taxpayer in response to the notice was also incorrectly filled in Part-B, as it continued to mention the vehicle used in the earlier movement.
The Bench found that no satisfactory contemporaneous evidence had been produced to establish that vehicle number UP 82 T 2315 had actually broken down at the relevant time and that the goods had consequently been transferred to vehicle number UP 44 BT 5284.
The Tribunal observed that the breakdown explanation remained substantially a claim made subsequently during the appellate proceedings.
It further held that the fresh e-way bill allegedly generated by the purchaser did not satisfactorily explain the discrepancy because it was not available at the time of interception. Even the document later presented to the proper officer contained incorrect vehicle details in Part-B.
The taxpayer emphasised that the physical quantity of the goods was not found to be in excess and that there was no allegation of a fake invoice, undervaluation or actual loss of revenue.
The Tribunal, however, noted that a difference existed between the weight stated in the documents and the weight calculated using the intercepted vehicle’s gross and unladen weights.
It also referred to the Allahabad High Court’s decision in M/s Lalitpur Power Generation Company Ltd. v. State of Uttar Pradesh, decided on April 15, 2025. The High Court had reiterated the statutory importance of a complete and valid e-way bill and considered the legal consequences of transporting goods in a vehicle different from the one declared in the e-way bill.
The Tribunal held that the taxpayer failed to produce reliable supporting evidence showing that the change of vehicle was caused by an unavoidable breakdown.
It rejected the argument that the mismatch in the vehicle number was merely a minor technical error.
“Once the first movement had concluded, any subsequent movement of the goods was required to be supported by a separate and valid documentary trail,” the Bench observed.
It added that whenever the vehicle was changed, the details recorded in the e-way bill had to correspond with the vehicle actually carrying the consignment.
The taxpayer also argued that it should not be held liable because the goods had allegedly been dispatched during the subsequent movement by Ambrosial India.
Rejecting this submission, the Tribunal noted that the invoice found with the driver at the time of interception was Invoice No. 61, which had been issued by the taxpayer and not by Ambrosial India.
No contemporaneous document issued by Ambrosial India was produced to establish that the goods were being transported by the purchaser rather than by the taxpayer.
The Tribunal clarified that the mere generation of an e-way bill by Ambrosial India mentioning the same goods was insufficient to prove that the goods in transit were unrelated to the supply made by the taxpayer.
The GSTAT confirmed the order passed under Section 129 as well as the decision of the first appellate authority. The appeal was accordingly rejected.
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