GSTAT August 2026 Round-Up: 21 GST Key Judgments on ITC, E-Way Bills, Pre-Deposit, Refunds & Jurisdiction

In Reddy Veeranna Constructions Pvt. Ltd. v. Appeal I Commissioner Appeal I Commissioner Appeal I Commissioner and Ors., (2026) taxcode.in 75 GSTAT, the GSTAT Hyderabad Bench considered admission of an appeal against an order confirming penalties under Sections 122 and 125 of the CGST Act read with Section 20 of the IGST Act. The Registry had also identified filing defects and non-payment of statutory pre-deposit.

The Tribunal examined Section 112(8) of the CGST Act before and after insertion of its proviso by the Finance Act, 2025 with effect from 1 October 2025. Before that amendment, the provision addressed admitted tax, interest, fine, fee and penalty, together with a percentage of the remaining tax in dispute; it did not specifically prescribe a pre-deposit for an appeal involving penalty alone. The Tribunal applied the reasoning relied upon from precedent that a right of appeal is substantive and that a later provision imposing an additional burden should not affect existing proceedings unless retrospective operation is clearly expressed or necessarily implied. The show cause notice, original order and appellate order in this matter all preceded 1 October 2025.

The Tribunal held, for admission purposes, that no pre-deposit under Section 112 was required because the appeal concerned only penalty and the 2025 proviso contained no indication of retrospective application. The conclusion was expressly without prejudice to the merits or to any later determination that a ten per cent penalty deposit might be required at final hearing. The Tribunal directed issuance of notice to the respondents and listed the matter after four weeks.

In Tata Unistore Ltd. v. Commissioner CGST & Ex. and Ors., (2026) taxcode.in 76 GSTAT, the GSTAT Thane Bench considered denial of transitional CENVAT, Krishi Kalyan Cess and VAT credit claimed through Form GST TRAN-1 for the transition to GST. The authorities had demanded reversal with interest and imposed an equal penalty, principally because the appellant had not produced invoice-level material supporting the closing credit balance.

The Tribunal held that proceedings under Section 74 of the CGST Act could not be used to determine whether CENVAT or VAT credit originally availed under the erstwhile laws was admissible under those laws. Under Sections 142(6)(a) and 174(2)(e), such questions remained governed by the existing law, and any challenge to wrong availment had to be pursued under the erstwhile regime. The Tribunal further held that the closing balance reflected in the pre-GST return was what was transitioned under Section 140; requiring invoices, credit registers and payment records to reconstruct that balance was impermissible where the credit had not previously been challenged. The statutory restriction on credit not admissible under GST was construed as addressing exclusions imposed by the GST legislation, not as authorising a fresh assessment of erstwhile-law eligibility.

Applying the Bombay High Court’s reasoning in Godrej & Boyce, the Tribunal held that transition of Krishi Kalyan Cess was sustainable on the stated statutory and notification framework. It also found the VAT stock credit supported and the remaining objections insufficient. The 100% penalty and Section 74 proceedings were unjustified because the relevant credit had been disclosed. The impugned order was set aside, the appeal was allowed with consequential reliefs, and the transitioned credit was held eligible.

In Commissioner CGST & CX v. Power Tech Global Pvt. Ltd., (2026) taxcode.in 77 GSTAT, the GSTAT Kolkata Bench heard three revenue appeals concerning reversal of proportionate input tax credit attributed to exempt supplies of MEIS duty credit scrips during 2017–2020. The appellate authority had set aside the demand, interest and equal penalty after applying the 2022 amendment to Rule 43 retrospectively.

The Tribunal rejected the taxpayer’s preliminary objection based on the CBIC monetary-limit circular, holding that the circular did not prevent the appeals in light of the provisions concerning composite orders and recurring or interpretative issues. On the substantive issue, it held that duty credit scrips became exempt supplies through the 13 October 2017 notification, while clause (d) of Explanation 1 to Rule 43, excluding their value from the aggregate value of exempt supplies, came into force only on 5 July 2022. Although Section 164 permitted retrospective rule-making, the notification expressly adopted a prospective commencement date. The amendment therefore could not be applied to transactions from 2017 to 2020, and the appellate authority had erred in granting that retrospective benefit.

The Tribunal nevertheless held that Section 74(1) had been wrongly invoked. The taxpayer had disclosed its turnover, credit and sale of duty credit scrips in returns and had produced supporting documents. The record contained no evidence of fraud, wilful misstatement or deliberate suppression to evade tax. The notice was accordingly unsustainable under Section 74. Applying Section 75(2), the Tribunal directed the proper officer to determine any tax liability as if the notice had been issued under Section 73(1), after giving the taxpayer an opportunity of hearing.

In Commissioner CGST & C. Ex. Raigad Commissionerate v. Kairav Chemofarbe Industries Ltd., (2026) taxcode.in 78 GSTAT, the GSTAT Thane Bench considered whether a revenue appeal concerning refund of accumulated and unutilised CENVAT credit was maintainable before the GST Appellate Tribunal. The refund claim was made under Section 142(3) of the CGST Act, but the original and appellate orders had been passed under Section 11B of the Central Excise Act read with the Cenvat Credit Rules, 2004.

The Tribunal focused on the text of Section 142(3), which provides that refund claims relating to CENVAT credit, duty, tax, interest or other amounts paid under the existing law are to be disposed of in accordance with that existing law, with the amount ultimately accruing being paid in cash. The provision preserves the application of Section 11B(2) of the Central Excise Act. The Tribunal therefore held that the fact that the refund arose in the GST transitional framework did not convert the underlying proceedings into proceedings governed by the GST appellate structure.

Following the Larger Bench decision in Bosch Automotive Electronics India Pvt. Ltd., the Tribunal concluded that appeals against refund or credit rejection orders passed under Section 142(3) were maintainable before the CESTAT. Because both orders under challenge had been made under the erstwhile Central Excise Act, the GSTAT lacked jurisdiction. The revenue appeal was dismissed as not maintainable, with liberty to approach the CESTAT, where the matter could be dealt with in accordance with law.

In Rinkesh Satija v. Commissioner Central Goods and Service Tax Commissionerate and Ors., (2026) taxcode.in 79 GSTAT, the GSTAT Gurugram Bench considered the appellant’s submission that the appeal had been incorrectly identified in Form APL-05 as not involving an issue reserved for the Principal Bench. The appeal concerned transitional CENVAT credit lying in the closing balance of an Input Service Distributor under the erstwhile GST regime.

The Tribunal examined the third proviso to Section 109(5) of the CGST Act, which permits the Government, on the recommendation of the GST Council, to notify cases or classes of cases that may be heard only by the Principal Bench. It also considered Notification No. S.O. 4219(E) dated 17 September 2025, issued under that proviso. The notification specifies that any case involving one or more issues covered under Section 20 of the CGST Act must be heard exclusively by the Principal Bench. Section 20 concerns the manner in which an Input Service Distributor distributes credit.

The Tribunal identified the central dispute as the appellant’s eligibility to transfer CENVAT credit standing in the Input Service Distributor’s balance through Form GST TRAN-1 under Section 140. It held that this issue was covered by Section 20 and consequently fell within the exclusive jurisdiction created by the notification. The appeal was therefore directed to be transferred to the Principal Bench.

In Yes Global Cargo Movers v. Joint Commissioner CGST Appeals II Delhi and Ors., (2026) taxcode.in 80 GSTAT, the appellant challenged denial of export-of-services treatment and consequential refund concerning freight services supplied to foreign clients. It contended that the statutory conditions under section 2(6) of the IGST Act were satisfied and that a written service agreement was not a legal prerequisite.

The Bench found that the dispute fundamentally concerned determination of the actual place of supply of the freight services and, consequently, whether the transactions qualified as export of services. The Appellate Authority had relied on the absence of a service agreement, the failure to examine the actual place of supply, and the non-furnishing of one FIRC. During the hearing, both parties accepted that the matter involved place of supply. Applying section 109(5) of the CGST Act, the Bench held that cases involving any issue relating to place of supply fall within the exclusive jurisdiction of the Principal Bench of the GST Appellate Tribunal.

The Delhi Bench concluded that it lacked jurisdiction and did not examine the merits of the export or refund claim. It directed the Joint Registrar to transfer the complete record to the Registrar of the Principal Bench, GST Appellate Tribunal, New Delhi. The parties were directed to appear before the Principal Bench Registrar on 17 August 2026. A registry defect concerning pre-deposit was noted, but no substantive determination was made on that issue.

In Vishal Chaudhary v. Honour Lane Logistics India Pvt. Ltd., (2026) taxcode.in 81 GSTAT, the Department appealed against an order allowing the respondent’s refund claim for accumulated input tax credit arising from export of freight-forwarding and allied services without payment of tax. The original rejection had treated the respondent as an intermediary under section 13(8)(b) of the IGST Act, while the appellate authority considered the place of supply to fall outside India.

The Tribunal observed that the entire dispute depended on whether section 13(9), as applicable during the relevant period, or section 13(8)(b), relating to intermediary services, governed the place of supply. The Tribunal referred to section 109(5) of the CGST Act, as substituted with effect from 1 August 2023, under which matters involving any issue relating to place of supply must be heard only by the Principal Bench. The appellant filed an undertaking acknowledging that the case belonged before the Principal Bench, and the respondent’s counsel similarly conceded that the appeal involved a place-of-supply issue.

The Delhi State Bench held that it had no jurisdiction to adjudicate the appeal. It did not decide whether the respondent was an intermediary, which place-of-supply provision applied, or whether the refund was otherwise allowable. The appeal and complete case record were directed to be transferred to the Principal Bench of the GST Appellate Tribunal for disposal in accordance with law. The parties were directed to appear before the Principal Bench Registrar on 14 August 2026.

In M S Steels v. Commissioner of Kerala State GST Thiruvananthapuram, (2026) taxcode.in 86 GSTAT, the appellant transported steel goods under a delivery challan from one registered premises to another premises of the same partnership firm under the same GSTIN. The goods were detained under section 129 because no e-way bill was available, and a penalty of Rs. 1,34,640 was imposed without any tax demand. The appellant had paid the penalty to secure release.

The Tribunal held that section 129(1) links the penalty to tax payable on the goods. Under section 7, the transaction had to involve a supply between persons or entities and consideration. The movement here involved only the appellant’s own premises, no second party, and no consideration. It therefore was not a supply, was not an intra-State supply for purposes of section 9, and generated no tax payable on which a section 129 penalty could be based. The Tribunal also found no allegation or reasoned finding of fraud, wilful misstatement, suppression, evasion, or non-genuineness apart from the missing e-way bill.

The Tribunal rejected the Revenue’s contention that “tax payable” was merely a measure for quantifying penalty and accepted the reasoning in Fabricship Pvt. Ltd. v. Union of India. It clarified that an e-way bill requirement for movements other than supply under Rule 138(1)(ii) did not make section 129 penalty applicable; any contravention would have to be addressed under the appropriate provision, including section 122(1)(xiv). The Order-in-Appeal was set aside, the appeals were allowed, and consequential relief was granted.

In Siddhi Vinayak Automobiles v. Commissioner of Kerala State GST Thiruvananthapuram, (2026) taxcode.in 87 GSTAT, automobile parts transported under tax e-invoices were detained because the driver could not produce an e-way bill. Notice in Form GST MOV-07 was issued on 18 April 2022, but the penalty order in Form GST MOV-09 was passed on 4 June 2022. The penalty of Rs. 1,38,706 was confirmed on appeal.

The appellant argued that section 129(3) required the proper officer to pass the order within seven days from service of notice. The Tribunal rejected the objection that limitation had been raised for the first time before it, observing that the relevant dates were undisputed and already recorded by the first appellate authority. On the statutory issue, it held that the word “shall” in section 129(3), read in the context of a fiscal provision authorizing detention and penalty, made the seven-day period mandatory. The absence of an express consequence for non-compliance did not permit the authority to disregard the prescribed time limit.

Because MOV-09 was issued forty-seven days after MOV-07, the Tribunal held that the order was illegal and without jurisdiction. It also recorded that the supplies were supported by e-invoices, the appellant had filed returns and paid the applicable tax, and the missing e-way bill did not establish an intention to evade tax. The Order-in-Appeal was set aside, the appeals were allowed with consequential relief, and the respondent was directed to release the bank guarantee immediately upon receiving the order.

In Atanu Mondal v. D.R. Steel Construction Co. Pvt. Ltd., (2026) taxcode.in 90 GSTAT, the Revenue challenged reduction of a demand alleging excess input tax credit of Rs. 53,95,795 for financial years 2018-19 to 2020-21. The taxpayer relied on year-wise reconciliations, returns, invoices, DRC-03 documents, and debit entries showing that the disputed credit had already been reversed or paid. The first appellate authority reduced the remaining liability to Rs. 2,08,058.90.

The Tribunal rejected the adjudicating authority’s reliance on section 16(4), noting the effect of section 16(5) for the relevant financial years. It also held that column 8 of Form GST DRC-03, which asks for “reasons, if any”, was not a mandatory field requiring an explanation in every case. On examination of the electronic records, the Tribunal found debit entries of Rs. 13,89,473 from the cash ledger and Rs. 5,98,500 from the credit ledger, along with the Revenue’s acknowledgment through DRC-04. It agreed with the first appellate authority that the reversals covered the disputed excess ITC and rejected objections based on the absence of mapping details or an ARN in DRC-03.

The Tribunal nevertheless found that the first appellate authority had not adequately determined any remaining liability for interest and penalty. It remanded the matter under section 113(1) for fresh computation after hearing the taxpayer, with reference to the applicable circular. It further held that the taxpayer could apply for waiver under section 128A if interest or penalty remained payable in relation to the section 73 demand, subject to statutory conditions and procedure. The Revenue’s appeal was disposed of on that limited remand, to be completed within three months from communication of the order.

In Pr. Commissioner CGST & CX Siliguri Commissionerate v. Agarwala’s Bitumex Pvt. Ltd., (2026) taxcode.in 92 GSTAT, the Revenue challenged orders allowing refund of accumulated input tax credit claimed on exported goods for January and February 2025. The Revenue relied principally on toll-plaza data suggesting that the consignments had not originated in West Bengal, and on the cancellation of registrations of suppliers further back in the supply chain.

The Tribunal confined the dispute to the objections raised in the show-cause notices. It found that tax payment was reflected in the GST returns, export of the goods was not disputed, and the respondent had produced e-way bills, bilty copies, shipping bills, EGM details, transporter’s certificate and bank statements. The e-way bills supported transportation under the Bill to Ship to model, under which goods may be delivered directly to the place of export on the recipient’s instructions. The Tribunal held that GST law did not require goods necessarily to commence from the registered premises of the supplier. It also found compliance with the conditions in Section 16(2), and held that toll-plaza receipts were not mandatory where the prescribed GST records and other transport and export documents substantiated movement and export.

The Tribunal further held that cancellation of registrations of second-line suppliers could not disentitle the respondent where its immediate supplier, M/s KS Metals, had valid registration and the respondent had committed no established irregularity. Additional allegations concerning investigations, licensing and other matters were raised for the first time before the Tribunal, were not supported by proper evidence, and were outside the show-cause notices. Applying Rule 45(1) of the GSTAT (Procedure) Rules, 2025 and Rule 112(1) of the CGST Rules, 2017, the Tribunal held that such material could not be introduced except in accordance with the applicable provisions. The Revenue’s appeals were dismissed.

In Om Prakash v. Islam Trading Co., (2026) taxcode.in 93 GSTAT, the Department appealed against an order setting aside tax and penalty imposed under Section 129(3) of the UPGST Act, 2017. A vehicle carrying iron scrap valued at ₹83,323 was intercepted on 8 March 2018 with a tax invoice and other documents, but without an E-Way Bill. The proper officer imposed tax of ₹15,000 and an equal penalty. The First Appellate Authority subsequently interfered after the E-Way Bill was produced during the proceedings.

The Tribunal held that Rule 138(1) required the prescribed information to be furnished before commencement of movement and that the E-Way Bill was a mandatory and integral part of the statutory mechanism for monitoring taxable-goods transportation. The admitted absence of the document when the vehicle was intercepted could not be treated as cured merely because an E-Way Bill was later generated or produced. The Tribunal also distinguished the authorities relied upon by the First Appellate Authority, finding that their factual circumstances were not comparable. It accepted the Department’s submission that the electronic, time-stamped nature of the E-Way Bill served a different function from a manually issued tax invoice.

On the facts, the Tribunal considered that transporting the goods without an E-Way Bill enabled manipulation of outward-supply records and books of account, and that the stated loading point at Baheri, Bareilly and delivery point at Kichha, Uttarakhand further supported an intention to evade tax. It described that intention as clear in the circumstances. The Tribunal therefore held that the original invocation of Section 129 was proper and that the First Appellate Authority had erred in setting it aside. The departmental appeal was allowed, the order dated 9 March 2018 imposing tax and penalty was restored, and the appellate order was quashed.

In Sri Parameshwara Bricks v. State Tax Officer Peddapalli Circle and Ors., (2026) taxcode.in 94 GSTAT, the appellants, manufacturers and suppliers of red clay bricks, challenged demands for differential tax, interest and penalty after audit comparisons between e-way-bill turnover and turnover reported in CMP-08 statements. The authorities concluded that the appellants had exceeded the ₹1.50 crore threshold for the composition scheme during 2020–21 and 2021–22, and therefore had become liable to regular-rate tax.

The Tribunal held that Section 10(3) operated automatically from the date aggregate turnover exceeded the prescribed threshold. From that date, the composition option lapsed and the appellants became liable under the regular scheme for supplies made thereafter, subject to adjustment of composition tax already paid on post-lapse turnover. Rule 6(2) additionally required the person to pay tax under Section 9(1), issue tax invoices and file the prescribed intimation. The Tribunal found that the Department had considered claimed typographical errors in e-way bills and saw no sufficient basis to disturb the turnover figures otherwise determined. It also left any possible input-tax-credit entitlement open, since no specific claim had been advanced and such entitlement would remain subject to statutory conditions.

Although the threshold finding and regular-tax liability were upheld, the Tribunal modified the computation. A composition dealer cannot separately collect tax or avail input tax credit while operating under the scheme. Since the Department had not alleged that tax was collected over and above the invoice values, those values had to be treated as inclusive of tax. Rule 35 therefore required the differential liability to be calculated using the prescribed cum-tax formula rather than by imposing tax on the entire tax-inclusive amount. The Tribunal held that this statutory benefit applied even though the appellants had not expressly claimed it. The proper officer was directed to recompute tax only for supplies made after the lapse date and to recalculate interest and penalty accordingly. The appeals were disposed of with that limited modification.

In Vijayan Sahadevan (Deceased) v. Commissioner of Kerala State GST Thiruvananthapuram, (2026) taxcode.in 96 GSTAT, proceedings concerned denial of input tax credit claimed in belatedly filed GSTR-3B returns for November 2017 to March 2018, together with interest and other demands. The proprietor died on 5 September 2024, after the GST registration had been cancelled with effect from 6 June 2023. His son, claiming to be the legal heir, pursued the appeals.

The Tribunal found that the proprietorship had ended on the proprietor’s death, that the registration had already been cancelled, and that no subsequent business or returns appeared in the deceased’s name. It treated the matter as falling under Section 93(1)(b), applicable where the business of a deceased taxable person has been discontinued. Under that provision, liability may be addressed against the legal representative only out of the deceased’s estate and to the extent that the estate can meet the charge. The Department had issued no notice to the legal heir, made no inquiry into the existence or extent of the estate, and had not commenced the statutory process contemplated by Section 93. The Tribunal held that proceedings could not validly continue merely in the deceased proprietor’s name and that the appellate order was unsustainable on this ground.

On the substantive credit issue, the Tribunal applied retrospective Section 16(5), inserted with effect from 1 July 2017. That provision permitted input tax credit for specified financial years where the relevant returns were filed by 30 November 2021. The returns for the relevant 2017–18 period had been filed by 31 July 2018 and 16 June 2019, well before that cut-off. The Tribunal consequently held that the credit could not be denied solely under Section 16(4) for delayed filing. It also distinguished the separate interest demand for delayed monthly returns, which was not displaced by Section 16(5). The impugned order-in-appeal was set aside, and the appeals were allowed with consequential relief.

In Amazon Development Centre (India) Pvt. Ltd. v. Deputy Commissioner of Central Tax and Ors., (2026) taxcode.in 97 GSTAT, the appellant challenged an order directing recovery of ₹43,36,084 with interest and penalty after a refund sanction order was disturbed. The appeal was presented in FORM GST APL-05 on 24 June 2026. The Registry later issued a defect notice for non-payment of the pre-deposit required under Section 112(8), and directed payment of 10 per cent of the relevant amount.

The appellant initially contended that no pre-deposit was payable because the matter concerned recovery of a refund already sanctioned rather than a disputed tax liability. Nevertheless, without prejudice, it paid ₹4,33,610 through FORM GST DRC-03 on 6 August 2026, within the time allowed for rectifying the notified defect under Rule 24(2) of the Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025. The jurisdictional Assistant Commissioner verified the payment. The Department objected that Section 112(8) required payment before the appeal could be filed and argued that the appeal had therefore been instituted without the required deposit.

The Tribunal rejected that objection. It held that the defect had been rectified within the period granted by the Registry and that the payment fully satisfied Section 112(8)(b). Crucially, under the Explanation to Rule 110(4) of the CGST Rules, 2017, an appeal is considered filed in law only upon issuance of the Final Acknowledgement. Because the pre-deposit had been made before that acknowledgement, the statutory requirement was satisfied notwithstanding its absence at the initial presentation stage. The Tribunal overruled the Department’s objection, held that the defect stood removed, and directed the Registry to admit and register the appeal for hearing on merits.

In Rodman Technologies Pvt. Ltd. v. Commissioner of Karnataka State GST Bengaluru, (2026) taxcode.in 98 GSTAT, the appellant challenged interest and penalty confirmed under Section 73 after accepting and paying excess ITC of Rs. 5,62,067 availed in GSTR-3B for December 2020. It contended that the liability related to debit notes from FY 2018-19 and therefore qualified for waiver under Section 128A.

The Tribunal held that Section 128A imposes cumulative statutory conditions, including that the demand must pertain to the period from 1 July 2017 to 31 March 2020. The decisive consideration was when the disputed ITC was actually availed and became the subject of the proceedings, rather than when the underlying debit notes were originally issued. The returns and records showed that the excess ITC was claimed for the first time in December 2020, not carried forward from FY 2018-19. The Tribunal also distinguished authorities concerning ITC-mismatch reconciliation and held that circulars or judicial decisions could not enlarge the period expressly prescribed by Section 128A.

The Tribunal found that the notice, the tax paid through DRC-03, and the surviving interest and penalty dispute all related to December 2020. The appellant had not established that the demand pertained to the eligible statutory period and had not filed the prescribed form seeking the Section 128A benefit. The appeal was dismissed, and the interest and penalty confirmed under Section 73(9) of the CGST and KGST Acts were upheld.

In Director General of Anti-Profiteering (DGAP) v. SJR Prime Corporation Pvt. Ltd., (2026) taxcode.in 103 GSTAT, the proceedings concerned alleged failure to pass on additional ITC benefit in relation to 117 sold units in Blue Water Phase II. An initial investigation calculated profiteering of Rs. 31,19,316, but the Respondent relied on reversal of Rs. 1,88,97,878 said to relate exclusively to the project. A supplementary DGAP report, based principally on a Chartered Accountant’s certificate, concluded that no additional ITC benefit had accrued.

The Tribunal held that the revised conclusion could not be accepted merely because a Chartered Accountant had certified the project-specific attribution. The certificate was relevant but not conclusive without examination of the books of account, ledgers, working papers, Form GST DRC-03, vouchers and other contemporaneous records supporting the reversal. The DGAP was required to determine the reason and period of the reversal, whether it related exclusively to Blue Water Phase II, and whether it concerned only the post-GST period or also the pre-GST period. The Tribunal further held that the effect of the reversal on the purchase-value denominator in the ITC-to-purchase-value comparison also had to be examined.

The supplementary report and clarification were not accepted in their existing form for final determination. The matter was remanded to the DGAP for limited verification of the reversal, examination of the underlying records, any consequential adjustment to the pre-GST and post-GST ratios, and fresh computation of profiteering, if any. The Tribunal did not finally decide whether the Respondent had profiteered and directed submission of a revised report by 22 October 2026, with the matter listed on 5 November 2026.

In D.S Traders v. Commissioner State Goods and Services Tax Department and Ors., (2026) taxcode.in 99 GSTAT, the appellant challenged penalty of Rs. 3,24,000 imposed under Section 129(3) after an excavator was intercepted while being transported without an e-way bill. The machine was accompanied by a delivery challan and was stated to have been sent to a project site on rent and returned to the appellant’s registered premises. The appellant argued that there was no sale, no intention to evade tax, and that the movement was within the alleged 20-kilometre exemption.

The Tribunal held that Section 68 read with Rule 138 requires the prescribed documents and e-way bill for movement of goods, including movement for reasons other than supply, subject to established exemptions. The fact that the excavator belonged to the appellant and was being returned did not itself dispense with compliance. The appellant also failed to produce sufficient evidence concerning the hours of operation, consideration charged for use of the machine, and corresponding GST treatment. In that context, the absence of an e-way bill could not be treated as merely procedural. The claimed 20-kilometre exemption was rejected because its applicability was not satisfactorily established, and the authorities relied upon by the appellant were found distinguishable.

The Tribunal concluded that the appellant had not proved a valid exemption or shown that the omission had no revenue implications. It therefore held that action under Section 68, Rule 138 and Section 129 of the CGST and UPGST Acts was justified. The original penalty order dated 18 July 2025 and the first appellate order dated 27 November 2025 were upheld, and the appeal was rejected.

In Neptune Sales Corporation v. Additional Commissioner GR-2 Appeal- IV Lucknow Addl. Commr. Lucknow and Ors., (2026) taxcode.in 102 GSTAT, the appellant challenged detention and penalty of Rs. 2,51,196 imposed under Section 129 in respect of goods transported with an invoice, e-invoice and valid e-way bill. The department inferred that the documents had been reused because the vehicle and e-way bill had been verified at an earlier location before interception in Lucknow.

The Tribunal found no discrepancy in the description, quantity, value or ownership of the goods. The conclusion that the goods were being transported for a second time rested principally on location and verification entries, without independent evidence that the goods had completed an earlier journey or had been delivered. The Tribunal rejected the proposition that reuse of documents or intention to evade tax could automatically be inferred from those circumstances. It applied authorities emphasizing that suspicion, coincidence and presumption cannot substitute for legal proof, and that the seizing authority must establish reuse of the e-way bill by evidence. The department had not produced cogent material, such as evidence of the goods crossing a toll plaza during an earlier transportation on the same day.

The Tribunal held that the department failed to establish transportation in contravention of the GST Act or Rules, reuse of the e-way bill, or intention to evade tax. The original order dated 19 January 2024 and appellate order dated 30 October 2024 were set aside. The appeal was allowed, and the Rs. 2,51,196 deposited pursuant to the detention and penalty proceedings was directed to be refunded in accordance with law.

In Jai Enterprises v. Pankaj Gandhi Additional Commissioner GR-2 Appeal IV and Ors., (2026) taxcode.in 101 GSTAT, the appellant challenged detention proceedings and a demand of Rs. 6,06,844 under Section 129 after its vehicle was checked twice at Jhakarkatti on the same day. The goods were accompanied by invoices, e-invoices and e-way bills valid through the following day. The department inferred that the documents were being reused, while the appellant explained the delay by reference to a vehicle breakdown and produced a repair bill and the driver’s affidavit.

The Tribunal found no discrepancy in the description, quantity, value or ownership of the goods. It held that the finding of re-transportation was based on inference from the earlier verification and later interception, without independent and cogent evidence that the goods had already completed a journey and been delivered. The Tribunal relied on authorities stating that presumption cannot replace evidence and that the seizing authority must prove e-way bill reuse. It also noted the absence of material such as toll-plaza evidence demonstrating an earlier completed transportation on the same day. The First Appellate Authority’s conclusion that intention to evade tax was automatically established was therefore legally unsustainable. The Tribunal further found that the department had not established that the vehicle-repair bill was fake or forged.

The Tribunal concluded that the allegation of reuse and intention to evade tax rested on suspicion rather than proof of contravention. Since the goods were accompanied by proper documents and no discrepancy was demonstrated, the detention and penalty orders could not stand. The appeal was allowed, both challenged orders were set aside, and the Rs. 6,06,844 deposited under the proceedings was directed to be refunded in accordance with law.

In Santosh Mani Mishra v. Islam Trading Co., (2026) taxcode.in 100 GSTAT, the Revenue appealed under Section 112 against an order setting aside tax and an equal penalty imposed under Section 129(3) of the UPGST Act, 2017. The goods, comprising 132.90 cubic feet of iron goods, were intercepted while being transported from Baheri, Uttar Pradesh, to Kichha, Uttarakhand, without an E-Way Bill available with the driver. Although the E-Way Bill and other supporting records were subsequently produced, the first appellate authority treated the omission as insufficient to sustain the demand.

The Tribunal held that carrying an E-Way Bill during transportation was mandatory under Rule 138(I), where the consignment value exceeded the prescribed threshold, and that the E-Way Bill formed an integral part of the statutory mechanism for monitoring taxable-goods movement. It distinguished the precedents relied upon by the first appellate authority on their facts. The Tribunal accepted that online E-Way Bill generation differed from manual issuance of a tax invoice and reasoned that non-generation before movement left scope for subsequent manipulation of books and records. It also considered the short route, the nature of the goods, production of the E-Way Bill only after interception, and repetition of similar conduct involving the same destination and mode of transportation.

The Tribunal concluded that the omission was a substantive breach rather than a merely technical lapse and that the surrounding circumstances established an intention to evade tax. It held that the original adjudicating authority had properly invoked Section 129 and that the first appellate authority erred in setting aside the demand. The Revenue’s appeal was allowed; the appellate order dated 24.09.2021 was set aside, and the proper officer’s order dated 09.03.2018 imposing tax of Rs. 47,844 and an equal penalty under Section 129(3) was restored.