Kerala GST Tribunal Sets Aside E-Way Bill Penalty On In-State Latex Shipment From Agriculturist With Delivery Challan, Despite Wrong GSTIN

On 4 January 2022, a vehicle carrying 7,560 kg of natural rubber latex valued at ₹3,85,560 was intercepted while transporting the goods to Kurian Abraham Pvt Ltd.

The delivery challan identified rubber grower Arun Scaria as the supplier but also bore the GSTIN of Anku Rubber, an unrelated registered dealer.

No e-way bill accompanied the goods.

The authorities detained the consignment and imposed a penalty of ₹38,556, which the appellant paid to secure release of the goods.

The first appellate authority upheld the penalty.

Before the Tribunal, the appellant relied on the Kerala State Tax Notification No. 3/2018 and affidavits from Scaria and Anku Rubber; Scaria stated that he was an unregistered agriculturist and that the GSTIN had been entered inadvertently.

The appeal challenged the order-in-appeal dated 20 September 2022.

Notification No. 3/2018-State Tax dated 14 May 2018 exempts the intra-State movement of specified goods, including rubber latex, from the e-way bill requirement irrespective of value when the goods move from an agriculturist’s premises to a registered business place and are accompanied by a delivery challan prescribed under Rule 55 of the Kerala State Goods and Services Tax Rules, 2017, or the specified invoice.

The Tribunal also referred to the statutory position that an agriculturist is not liable to registration in respect of produce arising from cultivation of land.

The notification’s exemption therefore turns on the nature and origin of the goods, the destination, and the prescribed accompanying document.

The Tribunal accepted Scaria’s affidavit that he cultivated rubber and supplied the latex from his plantation to the appellant, and found that the consignment was accompanied by a delivery challan.

It also noted that Anku Rubber denied supplying the goods and that there was no evidence connecting it, the appellant, or the transporter to the GSTIN printed on the challan.

On those facts, the Tribunal treated the GSTIN entry as an inadvertent clerical error rather than evidence that the transaction was between registered dealers.

It concluded that the notification’s conditions were met and that the mistaken entry did not defeat the exemption.

It treated the incorrect GSTIN as a condonable clerical mistake, set aside the penalties imposed under the impugned order-in-appeal, and allowed the appeal with consequential relief.