E-Way Bill Cancellations, Loading-Site Mismatches And 302.5-Kg Shortage Lead GST Tribunal To Restore ₹47.11-Lakh Demand

In brief

The question

1. Whether the First Appellate Authority erred in setting aside the Section 129(3) penalty despite the discrepancies in the transport documents and circumstances of loading.

The court held

The Tribunal allowed the Department’s appeal and annulled the First Appellate Authority’s order setting aside the enforcement action.

It also directed

The summary records tax of ₹7,18,726.14 and penalty of ₹39,92,923 as determined.

01Facts

On 14 February 2020, vehicle No. UP78DT0497 carrying lead ingots was intercepted.

The driver produced a tax invoice, e-way bill and bilty, but the proper officer identified discrepancies concerning loading locations, supplier details, the cancellation and subsequent generation of e-way bills, and a 302.500 kg shortage against the declared weight.

The officer imposed tax and penalty under Section 129(3) of the UPGST Act, 2017.

The First Appellate Authority set aside the penalty, accepting the explanation that the goods were documented and the weight variation was minor.

The Department appealed to the Tribunal, which considered whether the discrepancies justified the original enforcement action.

02Issues

i.1. Whether the First Appellate Authority erred in setting aside the Section 129(3) penalty despite the discrepancies in the transport documents and circumstances of loading.

ii.2. Whether the invoices and e-way bills, in the face of those discrepancies, sufficiently established the genuineness of the transportation.

03Law Applied

The Tribunal applied Section 129(3) of the UPGST Act, 2017, under which tax and penalty may be imposed in connection with goods detained or seized during transit for contravention of the Act or rules.

The decision also reflects the evidentiary principle that the existence of invoices and e-way bills does not, by itself, conclusively establish a genuine transaction where material inconsistencies in the transportation remain unexplained.

No precedent is identified in the supplied judgment text.

Provisions in the judgment · 1

U.P. Goods and Services Tax Act, 2017 Section 129

04Reasoning

The Tribunal found that the First Appellate Authority had not adequately assessed the cumulative effect of the discrepancies.

In particular, it had not properly examined supplier-wise weight variations, the unexplained loading locations, or the sequence of e-way bill cancellation and generation.

Because these matters remained unresolved, the Tribunal held that the documents produced did not conclusively establish that the transportation was genuine; the explanation that the weight difference was minor did not address the other inconsistencies.