The Goods and Services Tax Appellate Tribunal (GSTAT), Agra, on 30 October dismissed the second appeal filed by MG Traders and upheld the penalty of approximately Rs. 1.78 lakh imposed on the taxpayer.
A Bench of Judicial Member Ajeet Singh and Technical Member Vivek Kumar held that transporting goods on an expired e-way bill amounts to movement of goods without a valid e-way bill, attracting penalty under Section 129 of the Central Goods and Services Tax (CGST)/Uttar Pradesh Goods and Services Tax (UPGST) Act, 2017. It observed:
“Intention of a person is a mental state of mind and no positive evidence can be given by the department as it is commonly said that “Not even the devil himself can discern the secret thoughts of man's heart”. However, intention of a person or mens reamay be gathered from the facts and surrounding circumstances of a particular case.”
The case arose after a mobile squad intercepted a truck carrying moongfali dana from Jhansi, Uttar Pradesh, to Alwar, Rajasthan, on 5 May 2022.
During verification, the authorities found that the e-way bill issued for the consignment had expired. The department consequently detained the goods and imposed a penalty under Section 129(3) of the Act.
The taxpayer argued that the vehicle had broken down during transit, resulting in the expiry of the e-way bill. It contended that there was no intention to evade tax and relied on judicial precedents holding that a mere technical lapse in e-way bill compliance would not justify the imposition of a penalty.
However, the Tribunal found the explanation regarding the vehicle breakdown unacceptable. It noted that the repair slips were produced only during the adjudication proceedings and had not been shown to the mobile squad officer at the time of interception. The driver had also not informed the officer about the alleged breakdown.
It also noted that the e-way bill covered a distance of 383 kilometres from Jhansi to Alwar. It distinguished the judgments relied upon by the taxpayer, observing that the present case involved different circumstances and that the documents produced did not satisfactorily establish the alleged vehicle breakdown.
Further, the Bench observed that the intention to evade tax could be inferred from the facts and surrounding circumstances of a particular case.
It held that transporting goods on an expired e-way bill amounted to transportation without a valid e-way bill, in violation of Section 129(1) of the Act read with Rule 138 of the CGST Rules, thereby attracting penalty under Section 129(3). It said:
“...at the relevant time on interception of the vehicle in question it was found that goods were being transported on expired e-way bill which is tantamount of no e-way bill. Transportation of goods in such a way is violation of section 129(1) of CGST, Act read with rule 138 which attracts the imposition of penalty u/s 129(3) of the same act.”
Accordingly, the GSTAT dismissed the appeal and upheld the orders passed by the adjudicating authority and the first appellate authority.
For Appellant: Advocate M.P. Kulshrestha
For Respondent: Mukesh Kumar, authorised representative