GST penalty set aside for ignoring GPS evidence and relevant defence; matter remanded for fresh consideration.

GST penalty and appellate orders were set aside because the authorities failed to consider the assessee's GPS tracking report and explanation that the vehicle had reached the destination within the e-way bill validity period. The record indicated that the impugned orders dealt mainly with the driver's explanation and did not meaningfully address the relevant defence or the claim of mismatch in goods, which was unsupported by the physical verification report. The matter was remanded for fresh consideration, including the plea based on the amended Rule 138(3), and the authority was directed to re-examine the reply and decide afresh in accordance with law.

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Issues: (i) Whether the penalty and appellate orders under the goods and services tax regime were vitiated for failure to consider the GPS tracking report and the petitioner's explanation that the vehicle had reached the destination within the validity period of the e-way bill; (ii) whether the matter required remand for fresh consideration in view of the plea based on the amended Rule 138(3) and the absence of proper application of mind.

Issue (i): Whether the penalty and appellate orders under the goods and services tax regime were vitiated for failure to consider the GPS tracking report and the petitioner's explanation that the vehicle had reached the destination within the validity period of the e-way bill.

Analysis: The record showed that the petitioner had specifically relied on the GPS tracking report to support the case that the consignment reached the destination before expiry of the e-way bill and thereafter remained stationary because of lack of space. The impugned orders did not deal with that material explanation in any meaningful manner and instead proceeded mainly on the driver's explanation about ignorance. The departmental assertion of mismatch in the goods was also not supported by the physical verification report. The omission to examine relevant material and defence rendered the decision-making process incomplete and unfair.

Conclusion: The orders were vitiated for failure to consider relevant material and for breach of natural justice.

Issue (ii): Whether the matter required remand for fresh consideration in view of the plea based on the amended Rule 138(3) and the absence of proper application of mind.

Analysis: Since the authorities had not considered the petitioner's factual defence or the plea founded on the amended e-way bill rule, the controversy could not be finally resolved on the existing orders. The proper course was to set aside the orders and remit the matter so that the State Tax Officer could consider the reply and the amended rule in accordance with law. The Bank Guarantee was also directed to be returned if not already encashed.

Conclusion: The matter was remanded for fresh decision after considering the petitioner's defence and the amended rule.

Final Conclusion: The impugned penalty and appellate orders were set aside and the matter was sent back for fresh adjudication, leaving the authority free to decide the issue again in accordance with law.

Ratio Decidendi: A tax penalty order that ignores the assessee's relevant factual defence and supporting material, and is passed without proper application of mind, cannot stand and must be set aside with remand for fresh consideration.

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