2026-VIL-202-GSTAT-RPR
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SGST Tribunal

GST - Section 129(1) of CGST Act, 2017 - Whether intention to evade tax is a pre-condition - Appellant purchased scrap from a supplier in another State and, while the goods were in transit, issued an onward invoice to a buyer for the same goods and vehicle - Vehicle was intercepted and penalty under Section 129(1)(a) was imposed and affirmed in first appeal - Appellant contended that the discrepancies were procedural lapses without intention to evade tax - Whether intention to evade tax is a jurisdictional pre-condition for action under Section 129(1) - HELD - Section 129(1) applies where goods are transported or stored while in transit in contravention of the Act or Rules - Mens rea need not be independently proved for this civil statutory penalty. Penalty is not automatic, because the authority must, consistently with Sections 129(3) and (4), consider the explanation actually offered and give reasons for accepting or rejecting it. Section 126(6) excludes the general penalty disciplines where the Act fixes a sum or percentage - Whether the discrepancy is substantive enough to attract Section 129 must still be decided on the facts and after considering the defence - Intention to evade tax is not an independent jurisdictional pre-condition under Section 129(1), and the alleged contravention must be assessed on its facts.rnrn rnrnIssue 2: Sale of goods during transit - E-way bill requirements under Rules 138 and 138A - Supplier's first e-way bill declared the Appellant's place as the destination and remained valid in time - Appellant issued an onward invoice for direct delivery and generated a second e-way bill showing its own place as the dispatch point although the goods had not reached that place - The second e-way bill had expired before interception, and no extension was shown - Vehicle was intercepted at a location on a different road, and no time-stamped tracking evidence of the route was produced - Whether the first e-way bill covered the diverted movement, whether the second e-way bill corresponded to the actual movement, and whether the defects were merely technical - HELD - Section 10(1)(b) of IGST Act, 2017 permits an intermediate purchaser to effect an onward supply without first taking physical delivery. It does not deem the destination in an existing e-way bill to have changed or dispense with Rules 138 and 138A. Once the actual destination had changed, the first e-way bill, though alive in time, no longer truthfully represented the destination of the movement being undertaken. The second e-way bill declared a physical dispatch which admittedly did not occur and had expired before interception, and no attempt at extension under Rule 138(10) was shown - An alternative map and the plea of more than one route did not displace the recorded place of interception. Matching goods, quantity and vehicle particulars do not establish continuity of journey without reliable transport evidence. Circular No. 64/38/2018-GST does not treat an expired e-way bill coupled with a materially incorrect dispatch point as a minor discrepancy - The discrepancies, considered cumulatively, are neither isolated nor merely technical and constitute substantive contravention attracting Section 129(1) - Penalty under Section 129(1)(a) is sustained and the appeal is dismissedrnrn rnrnIssue 3: Payment of penalty through DRC-03 to secure release under Section 129(5) - Appellant paid the penalty through DRC-03 so that the goods and vehicle were released and thereafter challenged the order - Whether payment for release amounts to a conclusive admission - HELD - Payment through DRC-03 to secure release does not waive the statutory appeal or constitute a conclusive admission. Section 129(5) deems proceedings in respect of the notice concluded upon payment. As explained by the Supreme Court in ASP Traders, that consequence does not foreclose a reasoned determination or appellate scrutiny where payment secures release while liability remains contested - The appeal is decided only on whether, at interception, the goods were being transported under a valid e-way bill truthfully corresponding to the actual movement. The order was examined on merits and called for no interference. The amount paid shall be credited against the liability without double recovery.
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