GSTAT Upholds Rs 12.55 Lakh Penalty on Undeclared Goods:

On 31 August 2025, the Mobile Squad Officer, Agra, intercepted vehicle No. RJ11GB4888 for verification. The driver produced 38 bilties, corresponding invoices and four e-way bills. However, physical verification revealed a substantial quantity of makeup accessories and other goods for which no invoices, bilties or e-way bills had been produced at the time of interception. A notice in Form GST MOV-07 was issued on 7 September 2025. Subsequently, the transporter produced nine additional bilties and invoices, claiming that the goods were being transported from Delhi to Gwalior and that the driver had inadvertently failed to produce the second bundle of documents.

The Mobile Squad Officer rejected the explanation, noting that the alleged buyers and sellers had neither appeared before the authority nor established their identities, business credentials or ownership of the goods. Consequently, a penalty of Rs 12,55,846 was imposed in respect of goods valued at Rs 11,03,656. The First Appellate Authority dismissed the appeal on 17 October 2025.

The GSTAT observed that the driver had stated during verification that he had produced all the documents in his possession and had no other documents. The subsequent production of additional invoices and bilties, therefore, required reliable evidence connecting them with the goods found during physical verification. The Tribunal noted that the alleged buyers and sellers had not appeared to acknowledge the transactions or claim ownership of the goods. Further, the appellant failed to establish their identities, business activities and addresses. Discrepancies concerning multiple invoices of relatively small values and their relationship with the corresponding transport documents also remained unexplained.

The Tribunal clarified that the absence of buyers and sellers, by itself, may not invariably justify rejecting a transaction. However, when considered alongside the non-production of documents at the time of interception, delayed submission of additional documents and failure to establish the genuineness of the parties, the circumstances raised serious doubts about the appellant's explanation.

The GSTAT held that the appellant had failed to establish a reliable documentary link between the additional invoices and bilties and the undeclared goods found during physical verification. The Tribunal found no error of law or fact in the First Appellate Authority's order and dismissed the second appeal. Accordingly, the order dated 17 October 2025 affirming the penalty imposed by the Mobile Squad Officer, Agra, was upheld.