Physical movement of goods must be verified against transport evidence before confirming bill-trading penalty.

Penalty based on alleged bill trading and absence of actual supply required closer verification of the movement of goods, not merely documentary compliance. The Court noted that tax invoices, e-way bills, GSTR-2A/2B reflection, supplier filings, banking payments and lorry receipts were relied on, but the authority had treated them as insufficient without examining transport records, freight details, weighbridge slips, gate entries and third-party confirmation. It found a prima facie case on physical movement of goods and held that invoice and lorry receipt particulars should be checked against the vehicles that actually passed through the toll. The matter was remanded to the original authority for fresh decision on merits.

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Issues: Whether the order confirming penalty on the allegation of bill trading and absence of actual supply of goods could stand, and whether the matter required fresh consideration on proof of physical movement and receipt of goods.

Analysis: The challenge centered on the genuineness of inward supplies, the availability of supporting tax invoices, e-way bills, GSTR-2A/2B reflection, supplier filings, banking payments, and lorry receipts. The impugned order treated documentary compliance as insufficient and relied on the absence of independent corroboration such as transport records, freight details, weighbridge slips, gate entries, and third-party confirmations. The Court found that the petitioner had made out a prima facie case on the aspect of physical movement of goods and that the authority ought to have examined whether the invoices and lorry receipts matched the vehicles that actually passed through the toll.

Outcome: The matter was sent back to the original authority for a fresh order on merits after verification of the transport and movement evidence; no final adjudication on the tax liability or penalty was rendered.

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