GSTAT Remands GST Penalty Case for Fresh Adjudication Over Uncertain Goods Movement:

SRS Traders purchased 30 MT of TMT bars from Hi-Tech Power & Steel Ltd. on 1 September 2019. The supplier’s invoice identified the destination only as “C.G.” and no e-way bill had been generated for the initial movement. SRS Traders subsequently issued two invoices to buyers in Banda, Uttar Pradesh, and generated corresponding e-way bills for the same vehicle.

The vehicle was intercepted on the same day, but the exact time, location and destination of the consignment at the time of interception remained disputed. The appellant claimed that the goods were initially intended for delivery within Raipur district, which it argued was exempt from the e-way bill requirement under the applicable Chhattisgarh notification, and that the onward sales to Banda were arranged during transit.

The authority imposed tax of Rs 1,65,272 and an equal penalty of Rs 1,65,272 under Section 129 of the CGST Act, amounting to Rs 3,30,544. The Joint Commissioner (Appeals), State Tax, Raipur, upheld the demand through Order-in-Appeal dated 4 September 2020. SRS Traders challenged the orders before the GSTAT. 

The Tribunal observed that the requirement to generate an e-way bill under Rule 138 of the CGST Rules depends on the actual consignment, vehicle, destination and movement involved. Under Section 68 of the CGST Act and Rule 138A, the prescribed documents must be available for the relevant movement. The Tribunal noted that the Chhattisgarh notification dated 19 June 2018, issued under Rule 138(14)(d), provides an exemption for specified intra-State movements, subject to the stated exception for certain inter-district movements exceeding the prescribed value threshold. The corrected list includes specified iron and steel goods.

Accordingly, if the consignment was genuinely moving within Raipur district and had not yet commenced its onward journey, the exemption claim would require consideration. The Tribunal held that the subsequent invoices, e-way bills and September 2019 GSTR-1 and GSTR-3B returns supported the appellant’s claim of accounting for the onward sales but did not conclusively establish the destination or nature of the movement at the time of interception.

The Tribunal found that the conflicting records concerning the interception, the errors in the appellate order and the unresolved questions regarding the movement and destination prevented a reliable final determination on the existing record. Accordingly, exercising its powers under Section 113(1) of the CGST Act, the Tribunal set aside Order-in-Appeal No. 66/2019 dated 4 September 2020 and Order No. 39 dated 5 September 2019 passed in FORM GST MOV-09. The matter was remanded to the Assistant Commissioner, State Tax, Raipur, or the lawful successor having jurisdiction.