2026-VIL-137-GSTAT-BLR
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SGST Tribunal

GST - Penalty under Section 129 of the CGST Act, 2017 for non-filling of Part-B of e-way bill - Requirement of mens rea - Appellant's consignment of customised goods was intercepted and detained as Part-A of the e-way bill was intact and genuine tax invoices accompanied the goods, but Part-B containing vehicle particulars had remained unpopulated due to inadvertent technical omission - Appellant deposited the tax and penalty under protest, whereupon the appellate authority confirmed the penalty while the Respondent contended that generation of Part-B before movement is mandatory and attracts civil liability irrespective of fraudulent intent - Whether a technical omission of populating Part-B can sustain penalty under Section 129 when the transaction is fully documented and tax-paid - HELD - Penal provisions of this magnitude cannot be invoked mechanically divorced from mens rea - A technical or procedural variation in documentation cannot automatically raise a presumption of intent to evade tax, and documentation anomalies which are rectifiable or clerical must be adjudicated through the prism of proportionality - The burden rests on tax authorities to establish actual intent to evade tax before imposing penalty, and penalties are to be reserved for cases where an intentional act to defraud the tax system is evident - The decisions relied upon by the Respondent were rendered under legacy entry tax and sales tax check-post regimes and cannot be applied to the GST framework, which is an integrated destination-based tax system designed around digital transparency. The Section 129 targets wilful evasion and not isolated non-fraudulent clerical errors. No positive proof of intent to evade tax was established and the imposition of penalty under Section 129 is arbitrary and unsustainable, hence set side - The appeal is allowed - GST - Detention under Section 129 - Failure to issue final order in Form GST MOV-09 - Goods were detained under Section 129(1) and the Appellant deposited the tax and penalty under protest, but the Respondent did not issue a final speaking order in Form GST MOV-09 - Whether omission to issue Form GST MOV-09 vitiates the penalty demand - HELD - Under Section 129(3), upon detention and receipt of objections, the proper officer is statutorily mandated to pass a final speaking order in Form GST MOV-09 quantifying tax and penalty after affording an opportunity of hearing - The Respondent failed to issue Form GST MOV-09 and directly bypassed the statutory adjudication safeguards, and the omission to issue the mandatory final order severely prejudices the assessee's statutory rights and vitiates the underlying penalty demand - the order of the appellate authority is set aside and the penalty deposited under protest is to be refunded to appellant.
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