TaxTMI 
TaxTMI 
2026 (9) TMI 2062
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....Y VERSUS TECHNICAL OMISSION 3 IV. D. ANALYSIS AND REASONING: THE INDISPENSABILITY OF MENS REA UNDER SECTION 129 4-5 V. E. COMPARATIVE JURISPRUDENCE & DISTINGUISHING LEGACY PRECEDENTS 6 VI. F. PROCEDURAL INFIRMITIES: THE FATAL OMISSION OF FORM GST MOV-09 7 VII. G. CONCLUSION AND ORDER 8 I A. INTRODUCTION 2. Tax administrations should balance the objective of collecting revenue while protecting the freedom of business. GST was built as a modern, digital system to remove checkposts and make shipping goods smooth. But sometimes, enforcement officers focus more on minor procedural infractions instead of looking for actual tax fraud. The present appeal is in this contested terrain. 3. M/s. Sel Jagat....
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....fficer detained the goods and conveyance under Section 129(1) via Forms GST MOV-02, MOV-06, and MOV-07. The solitary ground for detention was that while Part-A of the e-way bill was intact and genuine tax invoices accompanied the goods, Part-B (containing vehicle and transit particulars) had remained unpopulated due to an inadvertent technical omission. • Deposit under Protest: To prevent catastrophic commercial paralysis and protect transit commitments, the Appellant deposited the total demanded sum of Rs. 4,08,744/- Comprising Rs. 2,04,372/- in integrated tax and an equivalent penalty of Rs. 2,04,372/-) under protest on September 20, 2018. The goods were released that evening via Form GST MOV-05. • Appellate Proc....
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.... underlying transaction is fully documented, tax-paid, and accompanied by genuine tax invoices and valid Part-A particulars. 6. The Appellant contends that: • The goods in transit were customized self-adhesive labels manufactured strictly to the unique proprietary specifications of M/s. The Himalaya Drug Company. • Due to their specialized nature, these labels possessed zero commercial value or marketability to any third party in the open market, thereby completely eradicating any rational motive, intent, or possibility of clandestine diversion or tax evasion. • The omission of Part-B details was a clerical oversight during the nascent, volatile implementation phase of the e-way bill system. 7. P....
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....ifiable, clerical, or stem from initial system integration hurdles, they must be adjudicated through the prism of proportionality. Treating an unpopulated Part-B field as conclusive evidence of smuggling, while ignoring immutable proofs of destination and tax payment, does violence to the statute. 11. The mandate of Sangeeta Jain: The Allahabad High Court in Sangeeta Jain v. Union of India (Hindustan Herbal Cosmetics) [2019 (29) G.S.T.L. 39 (All.)] definitively established that mens rea is an essential, indispensable prerequisite for imposing penal liabilities under Section 129. The Court held "5. A perusal of the order imposing penalty indicates that the original authority has stated that mens rea is not required for imposition....
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....developed under the GST era-exemplified by rulings such as RS Industrial Solutions v. Addl. Commr. [2019 (26) G.S.T.L. 38 (All.)], VSL Alloys (India) Pvt. Ltd. v. State of UP [2018 (19) G.S.T.L. 814 (All.)], Fiserv Merchant Solutions v. State of UP [2020 (35) G.S.T.L. 150 (All.)], and Tata Hitachi Construction Machinery Co. v. State of UP [2019 (28) G.S.T.L. 55 (All.)]-unambiguously holds that non-filling of Part-B alone cannot attract Section 129 penalties without independent, recorded findings on an attempt to evade tax. 16. Further, the Karnataka High court in BVM Trans Solutions unambiguously laid down the principle that each case must pass the litmus test of intention to evade tax for 100% penalty to hold under Sec 129 of the Act. T....
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....r Section 129(3) of the CGST/KGST Act, upon detention and the receipt of objections, the proper officer is statutorily mandated to pass a final speaking order in Form GST MOV-09 quantifying the tax and penalty after affording an opportunity of hearing. In the present case, the Revenue failed to issue Form GST MOV-09, directly bypassing statutory adjudication safeguards. As affirmed in decisions such as Aries Agro Ltd. v. State of UP [2019 (20) G.S.T.L. 297 (All.)], the omission to issue the mandatory final order severely prejudices the assessee's statutory rights and vitiates the underlying penalty demand. 19. In the instant case, the impugned first appellate order patently failed to establish the foundational requirement of intentio....