Presumption cannot sustain GST penalty where transport documents exist and no evidence shows a second movement of goods.

Penalty under Section 129(3) of the U.P. GST Act could not be sustained where the authorities relied only on a presumption that the same goods were transported twice through different vehicles. The detained vehicle carried the e-way bill and other required documents, and the record did not show any material proving that the goods had again been brought into Uttar Pradesh from Nagpur in a second movement. As the detention and penalty proceedings were unsupported by evidence, the penalty order was unsustainable. The appellate order was also set aside.

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Issues: Whether the penalty imposed under Section 129(3) of the U.P. Goods and Services Tax Act, 2017 could be sustained when the authorities proceeded on a presumption that the goods had been transported twice through different vehicles, despite the accompanying e-way bill and other documents.

Analysis: The detention and penalty proceedings were founded on an inference that the earlier vehicle had already carried the goods into the State and that the later interception reflected a second movement on the same consignment. The record showed that the goods originated from Birur, Karnataka, the transporter changed the vehicle en route, and the detained vehicle was carrying the relevant e-way bill and other required documents. No material was shown to establish that the petitioner had again brought the same goods from Nagpur into Uttar Pradesh through another vehicle. A proceeding based only on presumption, without supporting material, could not justify the penalty order. The objection regarding the invoice copy did not cure the absence of evidence supporting the alleged second transportation.

Conclusion: The penalty order and the appellate order were unsustainable and were set aside.

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