The GST Appellate Tribunal’s Bengaluru Bench has set aside a ₹2,04,372 penalty after Part-B of its e-way bill was left blank during the transport of goods.
The bench of Srikanth Venkatraman (Judicial Member) and Sudha Koka (Technical Member) has observed that the omission could not, by itself, justify a penalty under Section 129 when the consignment was supported by genuine invoices and the authorities had not established an intention to evade tax.
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The appellant/aasseessee manufactured customised self-adhesive labels for The Himalaya Drug Company in Bengaluru. It issued two invoices on September 17 and 18, 2018, and generated Part-A of the corresponding e-way bills, which contained details of the transaction.
On September 19, a commercial tax officer intercepted the vehicle carrying the labels at Malleshwaram, Bengaluru. Although the goods were accompanied by invoices and Part-A had been generated, Part-B of the e-way bills, which contains vehicle and transport details, had not been filled in. The officer detained the goods and vehicle under Section 129.
To secure their release, the company paid ₹4,08,744 under protest on September 20, 2018. According to the Tribunal’s account, this comprised ₹2,04,372 towards integrated tax and an equal amount as penalty. The Joint Commissioner of Commercial Taxes (Appeals)-1, Bengaluru, subsequently upheld the penalty in an order dated March 7, 2020. The company then approached the GSTAT.
The company maintained that the missing Part-B details were an inadvertent omission, not evidence of tax evasion. It pointed to the invoices, the completed Part-A details and the identified buyer and destination. It also argued that the labels had been made to the buyer’s specifications and had no practical market for diversion to another purchaser.
The revenue authorities contended that Part-B had to be completed before the goods moved and that a failure to comply attracted liability regardless of fraudulent intent.
The Tribunal found that the authorities had not produced independent evidence of an attempt to evade tax. In its view, a substantial penalty could not be imposed mechanically for a technical omission while disregarding the documents establishing the transaction and destination.
The Bench relied on decisions concerning GST transport documentation and distinguished older judgments arising under state sales tax and entry tax check-post regimes. It held that the reasoning in those earlier cases did not settle how the omission should be treated under the GST framework.
The Tribunal also identified a procedural defect. It recorded that the enforcement authority had failed to issue a final speaking order in Form GST MOV-09 after the detention proceedings. The Bench considered that omission a further reason the penalty could not stand.
Allowing the appeal, the GSTAT set aside the March 7, 2020 appellate order and directed a refund of the ₹2,04,372 penalty within four weeks from receipt of its order. The refund direction concerns the penalty amount; the order does not direct a refund of the separate ₹2,04,372 paid towards integrated tax.
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