The GST Appellate Tribunal held that the department had not established an intention to evade tax when it penalised a documented consignment solely because Part-B of its e-way bill had not been updated.

The bench of Srikanth Venkatraman (Judicial Member) and Sudha Koka (Technical Member) set aside a ₹17,02,620 penalty imposed on Woodfield Systems International Private Limited after a vehicle carrying its goods was intercepted with an un-updated Part-B of the e-way bill. The bench directed the tax authorities to refund the amount, which the company had deposited under protest, within four weeks of receiving the order.

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The appellant/assessee had dispatched loading and unloading equipment to Bharat Petroleum Corporation Limited in Kochi under a purchase order dated November 27, 2023. Its tax invoice, issued on March 27, 2024, recorded the vehicle number, HR 38 Z 3057. Part-A of the e-way bill was generated the following day.

On March 30, 2024, an enforcement officer intercepted the vehicle on NICE Road in Bengaluru. Part-B of the e-way bill, which contains transport details, had not been updated. The officer detained the goods and, on April 2, imposed a penalty of ₹17,02,620 under Section 129(3) of the GST law through Form GST MOV-09.

The assessee paid the amount under protest. Its first appeal was dismissed on June 14, 2024, after which it approached the Tribunal.

The assessee argued that the movement was supported by a genuine BPCL purchase order, a tax invoice carrying the correct vehicle number and an active Part-A e-way bill. It said the goods matched the accompanying documents and that the omission in Part-B arose from a logistical or portal-related difficulty.

The first appellate authority took a stricter view. It held that an e-way bill without Part-B was not valid for movement and considered the omission serious given the value of the consignment and the distance it was travelling. It also found insufficient evidence to accept Woodfield’s explanation of a technical glitch.

The Tribunal focused on whether the missing Part-B entry, by itself, justified the substantial penalty when the underlying supply and its primary documents were accounted for. It held that the authorities had not identified a mismatch in the goods or documents, or recorded a positive finding that Woodfield intended to evade tax.

The department had relied on earlier Supreme Court rulings concerning documentation requirements under previous tax systems. The Tribunal distinguished those decisions in the circumstances of this case, pointing to the documented transaction and the electronic framework under GST. It also referred to decisions dealing with procedural errors in goods movement, including Satyam Shivam Papers, Hemanth Motors and BVM Trans Solutions.

The order contains inconsistent descriptions of the penalty rate, referring to it as both 100% and 200% in different passages. The amount imposed and ordered to be refunded, however, is consistently stated as ₹17,02,620.

The Tribunal allowed Woodfield’s appeal and quashed both the June 14, 2024 first appellate order and the April 2, 2024 penalty order. It directed the authorities to process the refund of ₹17,02,620 within four weeks from receipt of its order.

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