E-way bill reuse allegations require positive evidence; penalty cannot stand on presumption alone.

Penalty under Section 129(3) of the U.P. GST Act could not be sustained where the seizing authority failed to produce positive evidence that the e-way bill had been reused for the intercepted goods. The Court held that an order based only on assumption, bare inference, or unsupported presumption was insufficient to justify the levy of tax and penalty. As no cogent material on record established the alleged misuse of the e-way bill, the tax and penalty orders were set aside and relief was granted to the assessee.

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Issues: Whether tax and penalty imposed under Section 129(3) of the U.P. Goods and Services Tax Act, 2017 for alleged reuse of an e-way bill could be sustained in the absence of positive evidence from the seizing authority.

Analysis: The dispute turned on whether the seizing authority had discharged the initial burden of proving, by cogent evidence, that the e-way bill had been reused for transportation of the intercepted goods. The order under challenge proceeded on the assumption that the invoice and e-way bill did not relate to the goods and that the bill had been used beyond its validity period. The Court found that, on the facts placed before it, no evidence had been produced by the seizing authority to establish reuse of the e-way bill. In such circumstances, a penalty could not rest on a bare inference or presumption unsupported by material on record.

Conclusion: The tax and penalty orders were unsustainable and were set aside, resulting in relief to the assessee.

Final Conclusion: Penalty proceedings based on alleged misuse of an e-way bill require proof by the revenue authority, and an unsupported conclusion cannot justify the levy.

Ratio Decidendi: In proceedings alleging reuse of an e-way bill, the seizing authority must first establish the allegation by positive evidence, and a penalty cannot be imposed on mere presumption or unsupported conclusion.

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