Appellate authority overturns GST penalty due to technical error, lack of detailed explanation.

The appellate authority set aside the impugned order, finding no intention of GST evasion in the discrepancies related to E-way bills and invoices. A penalty of Rs. 25,000 was imposed on the appellant under Section 125 of the CGST Act, 2017 for a technical error. The adjudicating authority's lack of detailed explanation and proper enquiry led to the appeal's success.

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Issues Involved:
1. Legality of the impugned order under the RGST & CGST Act, 2017.
2. Discrepancies in the E-way bill and invoices.
3. Adequacy of the adjudicating authority’s enquiry.
4. Admission of liability by the appellant.
5. Appropriateness of the show cause notice.
6. Correctness of details in the impugned order.
7. Applicability of penalty under Section 125 of the CGST Act, 2017.

Issue-wise Detailed Analysis:

1. Legality of the Impugned Order:
The appellant contended that the impugned order was "bad in law, against the provisions of RGST & CGST Act, 2017 and against principles of natural justice." The adjudicating authority failed to provide a detailed explanation of the discrepancies found, specifically the quantity of goods without invoices and valid E-way bills. The order lacked proper attention to the facts and submissions presented by the appellant.

2. Discrepancies in the E-way Bill and Invoices:
The primary discrepancy noted was that "some material/goods were found without invoice and E-way Bill and the rest of the material were also without valid E-way Bill as the vehicle number was different in the said E-way Bill." The appellant argued that this was a technical error without any intention of GST evasion. The goods were transported within a 50 km radius, and as per Rule 138 (3) of the CGST Rules, 2017, the vehicle number was not mandatory for such short-distance movements.

3. Adequacy of the Adjudicating Authority’s Enquiry:
The appellant argued that the adjudicating authority passed the order without conducting a proper enquiry. The authority did not verify the facts and submissions provided by the appellant, including the certificate from the transport company confirming the receipt of 17 packets.

4. Admission of Liability by the Appellant:
The appellant clarified that they did not admit liability but sought an early release of the goods and vehicle. The adjudicating authority misinterpreted this as an admission of guilt.

5. Appropriateness of the Show Cause Notice:
The show cause notice was issued with only one day's notice for the appellant to attend the office, which was deemed insufficient and improper by the appellant.

6. Correctness of Details in the Impugned Order:
The adjudicating authority made errors in the details of the conveyance. The impugned order mentioned incorrect vehicle numbers and failed to accurately reflect the actual conveyance used. This indicated a lack of proper attention and verification by the adjudicating authority.

7. Applicability of Penalty under Section 125 of the CGST Act, 2017:
The appellant admitted to a technical error in not updating the vehicle number in the E-way bill. The adjudicating authority imposed a penalty based on this technical error. However, the movement was within a 50 km radius, making the vehicle number non-mandatory as per Rule 138 (3) of the CGST Rules, 2017. The adjudicating authority did not provide sufficient reasons for the seizure and penalty. The appellate authority found no intention of GST evasion and thus set aside the impugned order. However, a penalty of Rs. 25,000 was imposed under Section 125 of the CGST Act, 2017 for the technical error.

Conclusion:
The appeal was allowed, and the impugned order was set aside. A penalty of Rs. 25,000 was imposed on the appellant under Section 125 of the CGST Act, 2017 for the technical error of not updating the vehicle number in the E-way bill. The adjudicating authority's order lacked proper reasoning and attention to the facts and submissions provided by the appellant.

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