The Goods and Services Tax Appellate Tribunal (GSTAT), Kolkata Bench, has held that toll plaza data not mandatory for Input Tax Credit (ITC) refund.

The bench of  Sunil Kumar Singh (Judicial Member) and  Bijoy Kumar Kar (Technical Member) has observed toll plaza movement data is not a mandatory statutory requirement for establishing transportation of goods or availing ITC, particularly when the taxpayer has produced other substantive documentary evidence such as tax invoices, e-way bills, bilty copies, shipping bills, Export General Manifest (EGM), transporter’s certificate and banking records.

The case concerned a Siliguri-based taxpayer engaged in the supply of iron/non-alloy steel bars and rods and bitumen falling under HSN 7214 and 2714. The taxpayer was also engaged in exports and had claimed refund of accumulated ITC under Section 54 of the CGST Act, 2017.

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For January 2025 and February 2025, the taxpayer filed refund claims of ₹11,41,828 and ₹27,65,697, respectively. During scrutiny, the jurisdictional adjudicating authority noticed certain alleged deficiencies and issued separate show cause notices. The refund claims were subsequently rejected through orders dated May 28, 2025 and June 5, 2025.

The taxpayer challenged the rejection before the first appellate authority. The Joint Commissioner (Appeals), CGST & CX, Siliguri Appeal Commissionerate, allowed the refund claims and set aside the original orders through Orders-in-Appeal dated September 12, 2025.

The Revenue thereafter approached GSTAT, challenging the appellate relief granted to the taxpayer.

One of the principal arguments of the Revenue was that the goods allegedly purchased by the taxpayer from its supplier, did not originate from the declared dispatch location in West Bengal.

According to the Revenue, analysis of toll plaza data relating to 14 e-way bills showed that the consignments did not cross toll plazas in West Bengal. Instead, the recorded movement was in Bihar and Uttar Pradesh. The Revenue argued that this contradicted the declared dispatch location and cast serious doubt on the actual movement and genuineness of the inward supplies.

The Revenue further alleged that KS Metals had procured goods from two suppliers whose GST registrations had been cancelled ab initio before the disputed transactions. According to the Department, this indicated that the upstream goods were not genuinely available and consequently the ITC claimed by the taxpayer could not be treated as eligible.

The Department also raised concerns relating to the movement of vehicles, verification by customs authorities, the licensing requirements applicable to bitumen and alleged discrepancies concerning the ITC used for the exports. It argued that merely possessing tax invoices, e-way bills and GSTR-2B reflection could not by itself establish actual receipt of goods where the underlying supply was allegedly doubtful.

The taxpayer, however, maintained that the Revenue’s reliance on toll plaza data was misplaced because the transactions were undertaken under the “Bill To – Ship To” model.

According to the taxpayer, the supplier was instructed to deliver the goods directly to the Land Customs Station (LCS), Jogbani, from where the goods were exported. The e-way bills reflected the ship-to location at the customs station. The taxpayer argued that the GST law does not require goods in a bill-to-ship-to transaction to necessarily commence movement from the registered premises of the supplier.

The taxpayer also contended that it was not privy to the precise location from which KS Metals sourced the goods or the route adopted by the transporter. Since the taxpayer had received the goods at the ship-to location and subsequently exported them, it argued that it had no obligation to conduct an independent forensic investigation into the supplier’s upstream transactions or toll-plaza movements.

The taxpayer placed reliance on a comprehensive documentary trail, including e-way bills, bilty copies, shipping bills, EGM details, transporter certificates and bank statements. It argued that these documents established actual movement, receipt and subsequent export of the goods.

A significant aspect of the Tribunal’s decision was its examination of what was actually alleged in the original show cause notices.

The GSTAT recorded that the Department had raised two principal objections in the SCNs: first, that the goods had not been dispatched from the declared location in West Bengal; and second, that KS Metals had purchased goods from two suppliers whose registrations had been cancelled ab initio.

The Tribunal noted that the Department had itself accepted that the goods were received at the ship-to location and were subsequently exported. The export was supported by the Land Customs Station records, while a Bank Realization Statement had also been received by the DGFT authorities. Thus, there was no dispute regarding the actual export of the goods; the controversy principally concerned the mode and route of transportation.

After examining the e-way bills and other records, GSTAT found that the transactions were undertaken through the Bill To – Ship To model.

The Tribunal observed that under such an arrangement, the exporter can instruct the supplier to deliver the goods directly to the place of export. It specifically held that there is no provision under GST law requiring goods to necessarily commence their journey from the registered place of the supplier.

The taxpayer had produced e-way bills, bilty copies, shipping bills, EGM details, transporter certificates and relevant bank statements. The Tribunal noted that these documents established the engagement of a registered GTA, delivery of the goods and subsequent export, and that these documents had not been disputed by the Revenue.

The Tribunal’s key finding concerned the evidentiary value of toll plaza data.

GSTAT examined Section 16(2) of the CGST Act, 2017 and concluded that the taxpayer had complied with the applicable statutory conditions for availment of ITC. It rejected the proposition that toll plaza receipts or toll movement data constituted a mandatory statutory requirement for establishing transportation of goods.

The Bench relied upon the Allahabad High Court’s decision in Raghuvansh Agro Farms Limited v. State of U.P., where the Court had dealt with a similar issue concerning reliance on toll plaza receipts to establish physical movement of goods. GSTAT noted the principle emerging from that decision that where tax invoices, e-way bills, bilty and banking records support the transaction, the absence of toll plaza receipts cannot, by itself, justify rejection of the transaction.

GSTAT accordingly held that toll plaza receipts are not mandatory documents for establishing transportation of goods or for availing ITC. It observed that valid transportation and export can be supported through documents reflected on the GST portal and other substantive records, including tax invoices, e-way bills, bilty copies and banking-channel payments.

The second major issue concerned the cancellation of the GST registrations of suppliers further up the supply chain.

The Revenue argued that KS Metals had procured goods from two entities whose registrations had been cancelled ab initio and that this rendered the entire chain suspect.

GSTAT, however, distinguished the taxpayer’s direct supplier from the upstream suppliers. It recorded that KS Metals was itself a valid registered supplier and continued to exist on the GST portal. There was no direct connection between the taxpayer and the second-line suppliers whose registrations had been cancelled.

The Tribunal therefore held that the taxpayer could not be denied the benefit of ITC refund merely because of alleged irregularities attributable to suppliers further removed from the taxpayer, particularly when the taxpayer’s own direct transaction and export were supported by documentary evidence.

Another important aspect of the ruling was GSTAT’s treatment of additional grounds raised by the Revenue at the appellate stage.

The taxpayer objected that several allegations relied upon by the Revenue before GSTAT had not been part of the original SCNs or the adjudication proceedings. These included allegations concerning customs verification, investigations, licensing requirements for bitumen and other matters.

The taxpayer argued that allowing the Revenue to introduce fresh allegations at the Tribunal stage would effectively enlarge the scope of the original proceedings and deprive the taxpayer of an opportunity to respond to those allegations before the adjudicating authority.

GSTAT accepted the substance of this objection. The Tribunal recorded that the Revenue had raised additional grounds for the first time before it and had not produced supporting documents demonstrating the alleged investigation. It also noted that the issue concerning licensing requirements for bitumen had not been raised in the original SCN despite the Department allegedly being aware of the matter.

The Tribunal also referred to Rule 45(1) of the GSTAT (Procedure) Rules, 2025 and Rule 112(1) of the CGST Rules, 2017, concerning the production of additional evidence at the appellate stage.

GSTAT noted that the Revenue had not produced documents before the Tribunal substantiating certain allegations and had not made a proper prayer for admission of additional evidence. The Bench held that the statutory and procedural framework restricts the introduction of additional evidence except in exceptional circumstances.

The Tribunal therefore declined to permit the Revenue to strengthen its case through fresh allegations or unsupported material that had not formed part of the original adjudication.

After examining the records, SCNs, documentary evidence and rival submissions, GSTAT concluded that the taxpayer had satisfied the relevant conditions for ITC and refund.

The Tribunal found that the exports were not disputed, the goods had reached the ship-to location, the transactions were supported by substantive documents, and the direct supplier continued to hold a valid GST registration. The absence of toll plaza movement in West Bengal could not, in the circumstances, override the documentary evidence supporting the Bill To – Ship To transactions.

GSTAT ultimately dismissed both department appeals by upholding the first appellate authority’s orders allowing the refund claims. The official summary records that the impugned Orders-in-Appeal were upheld and the Revenue appeals were dismissed.

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