Bona fide inter-State goods movement during GST transition supported by invoices and challans should not attract penalty

Inter-State movement of goods during the GST transition period, supported by tax invoice, delivery challan, lorry receipt and other title documents, was treated as bona fide even if e-way bills were absent, so penalty or tax action should not be imposed where the prescribed documents are produced. The High Court followed an earlier Division Bench view on the same transitional documentation framework and directed the authorities to assess the petitioners' papers on that basis. It also required reconsideration of the amounts already paid and examination of whether refund was due, leaving the matter to fresh administrative determination.

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Issues: Whether goods transported across the State borders during the GST transition period, supported by tax invoice, delivery challan, lorry receipt and other title documents but not by e-way bills, could be treated as bona fide movement of goods so as to avoid penal action and whether the amounts paid in earlier proceedings were liable to be reconsidered for refund.

Analysis: The transition from the pre-GST sales tax regime to the GST regime created a period in which the documentation accompanying inter-State movement of goods was governed by Government Orders issued by the State. A prior Division Bench had already examined the same statutory and administrative framework and had laid down guidelines for deciding whether a particular movement of goods was proper. The Court found no reason to depart from that view and held that, where e-way bills or the other specified documents such as tax invoice and delivery challan of the originating State are produced, the movement must be treated as bona fide and should not attract penalty or tax action. The authorities were therefore required to examine the petitioners' documents on that basis and decide the request for refund of the amounts already paid.

Conclusion: The authorities must apply the stated guideline to determine whether the transport of goods was proper and whether the penal amounts paid should be refunded; the petitioners obtained only a partial substantive relief through reconsideration.

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