2026-VIL-295-GSTAT-ERN
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SGST Tribunal

GST - Validity of proceedings for penalty under Section 129(1) of CGST Act - Vehicle carrying goods with a tax invoice and e-way bill was intercepted while unloading the goods at the premises of a dealer different from the place of delivery shown in the e-way bill. The notice under Section 129(3) alleged only that the person in charge failed to produce documents for unloading - Whether penalty under Section 129(1) can be proposed without specifying the provisions of the Act or Rules that have been contravened - HELD - Section 129(1) can be invoked only when there is a contravention of the Act or Rules, and such contravention is a sine qua non for its invocation. The SCN did not mention any specific provision of the Act or Rules that was contravened. The order-in-original relied on Sections 143(1) and 31 and Rules 45(1), 46 and 55, none of which was cited in the SCN. The Appellant was thus left to defend charges which were not intimated to him in the notice. The SCN delineates the scope of the proceedings, and any ground, reasoning or claim which does not figure in it cannot be permitted to adversely affect the noticee. The proceedings are void ab initio and are vitiated by a breach of the principles of natural justice - The order in appeal is set aside and appeal is allowed - Penalty on goods sent for job work - The adjudicating authority recorded that evidence of transfer of goods to the job worker and an e-way bill for job work were furnished after the interception. The authority nevertheless held that a taxable supply could not be ruled out because the recipient was also a trader - Whether penalty under Section 129(1) is leviable on goods that have been sent for job work - HELD - The adjudicating authority conceded that the transaction was one of job work. The only reason for the penalty was that the documents were not available at the time of detention. The later observations on the possibility of tax suppression were contrary to the earlier finding and rested on conjectures, apprehensions and speculation without any evidence - Once a transaction is accepted as job work, its nature cannot be altered merely because of a discrepancy in the time of generation of the e-way bill. Penalty under Section 129(1) is leviable only in terms of the tax payable on such goods. Under Section 143(1), goods are sent for job work without payment of tax, so no tax is payable on the goods. Once tax on the goods is non est, penalty under Section 129(1) is not leviable - The levy of penalty is not sustainable and the appeal is allowed
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