The Goods and Services Tax Appellate Tribunal (GSTAT), State Bench at Agra, has dismissed a trader’s appeal against a tax and penalty demand, holding that manual invoices produced more than three months after a search could not retrospectively validate the transportation of goods without the prescribed documents.

The Bench of Ajeet Singh (Judicial Member) and Vivek Kumar (Technical Member) upheld the first appellate authority’s order, which had reduced the original tax and penalty demand from ₹5,09,912 to ₹1,23,740. The Tribunal found no reason to interfere with the concurrent findings rejecting the belatedly produced invoices. 

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The order, pronounced on October 8, 2026, also upheld the relief already granted by the first appellate authority in relation to goods subjected to separate proceedings under Section 129. In the circumstances of the case, the Tribunal observed that two parallel proceedings for the same cause of action could not be permitted under the same GST legislation.

The dispute arose from a search conducted by the Special Investigation Branch at the business premises of a trader dealing in copper and aluminium wires and electrical equipment, on November 27, 2017.

During the search, officers found copper and aluminium wires being unloaded from a tempo. According to the order, neither the driver nor the taxpayer’s representative present at the premises produced the relevant documents for those goods.

The driver showed only a receipt bearing the transporter’s name. The taxpayer explained that the transporter had mistakenly left the invoice and bilty at the transport company’s office.

The officers also examined goods stored at the premises against the books of account. The order records that the relevant documents were not produced for verification. The investigation referred to a stock and account difference of ₹13,068, goods worth ₹8,12,701 being unloaded from the tempo, loose slips allegedly relating to unaccounted sales, and differences among the GST returns and statements examined by the department.

Proceedings were subsequently initiated under Section 74. Although the taxpayer submitted a detailed reply to the show-cause notice, the Tribunal recorded that supporting evidence had not accompanied that reply.

The adjudicating authority concluded that tax had been evaded on turnover of ₹14,16,418. It imposed tax of ₹2,54,956 and an equal penalty, taking the total demand to ₹5,09,912.

The taxpayer challenged the adjudication order before the first appellate authority at Agra, which partly allowed the appeal and reduced the combined tax and penalty demand to ₹1,23,740.

Seeking complete relief, the taxpayer then approached the GSTAT under Section 112 of the CGST/UPGST Acts.

The issue before the Tribunal was whether the first appellate authority had committed an error of law or fact by declining to allow the appeal in its entirety. 

Appearing for the taxpayer, CA (Advocate) Saurabh Agarwal argued that the transporter’s failure to carry the invoices was a clerical mistake.

He submitted that tax invoices, bilty, bank statements and ledger records relating to the goods had been produced during proceedings before the adjudicating and first appellate authorities, but had not been properly considered.

The taxpayer also disputed the treatment of 14 loose slips recovered during the search, contending that documents explaining those slips had been furnished.

The Revenue’s representative, Mukesh Kumar, supported the first appellate authority’s findings and sought dismissal of the appeal.

While examining the reduction in demand, the Tribunal noted that the goods being unloaded from the tempo had also been subjected to proceedings under Section 129. The first appellate authority had accounted for the amount collected in those proceedings while granting relief.

The Tribunal further noted that the Revenue had not challenged that finding through an appeal or memorandum of cross-objections.

It therefore upheld the relief granted by the first appellate authority, observing that parallel proceedings for the same cause of action could not be initiated against the taxpayer under the same legislation. This finding preserved the reduction already granted; it did not result in the remaining demand being set aside.

The Tribunal then considered whether the authorities had correctly rejected the documents subsequently produced to explain the goods found during the search.

It recorded that two manual invoices were submitted on March 6, 2018, more than three months after the search. One invoice, dated November 25, 2017, was issued by DG Sales Corporation, Kanpur, while the other, dated November 23, 2017, was issued by Shivam Electricals, Varanasi.

The taxpayer maintained that the invoices had been misplaced at the transporter’s office and were produced once they were found.

However, the Tribunal emphasised that the relevant documents had neither been produced during the search nor submitted with the reply to the show-cause notice. It agreed with the authorities below that the belated submission was an afterthought.

Referring to Section 68 read with Rules 138 and 138A, the Tribunal reasoned that the prescribed documents must accompany goods in transit and that subsequent production or creation of documents could not retrospectively cure the breach identified in this case.

It also considered the absence of documentation for the copper and aluminium wires, which it described as high-value commodities susceptible to unrecorded trade, as supporting an inference of an intention to evade tax. According to the Bench, the taxpayer had failed to rebut that inference with relevant and reliable evidence. 

The Tribunal concluded that the findings rejecting the manual invoices were well reasoned and did not warrant interference. It dismissed the second appeal, upheld the first appellate order and made no order as to costs.

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