GSTAT Upholds Penalty Only For 32 Extra Plywood Pieces, Rejecting Department’s Bid To Penalise The Entire Consignment

On 18 July 2023, a vehicle transporting shuttering plywood was intercepted.

The tax invoice and e-way bill covered 418 pieces, but physical verification recorded 450 pieces, leaving 32 pieces in excess of the declared quantity.

The Proper Officer imposed a penalty of ₹57,870 under Section 129(3) of the CGST/UPGST Act, 2017, on the entire consignment.

The First Appellate Authority reduced the penalty to apply only to the excess quantity.

The Department appealed under Section 112(3), contending that the penalty should apply to the whole consignment.

The Tribunal dismissed the appeal.

Section 129(3) of the CGST/UPGST Act, 2017, provides for penalty in cases involving goods transported in contravention of the Act.

Section 112(3) provides for an appeal to the GST Appellate Tribunal.

The Tribunal applied the principle that a contravention and resulting penalty must be supported by evidence relating to the goods alleged to have been transported in violation of the Act.

The documents covered 418 pieces, while physical verification disclosed 32 additional pieces.

The Tribunal found the contravention established only as to those additional pieces and no sufficient evidence that the remaining 418 documented pieces were transported in violation of the Act.

It therefore rejected the Department’s contention that the penalty should extend to the entire consignment.