TaxTMI 
TaxTMI 
2026 (10) TMI 208
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....H9147 on 18.08.2025, while it was transporting a consignment of areca nuts (HSN Code 080280), weighing 3,990 kg. The goods were being transported from M/s Baba Mahakal Enterprises, West Bengal, to the appellant, M/s A H Traders, Lucknow. The consignment was accompanied by a tax invoice bearing No. BME/86/2025-26 dated 13.08.2025, along with the relevant transport documents and e-way bill particulars. 1.3. During the course of interception and verification, the proper officer examined the documents accompanying the goods and noticed discrepancies relating to the address and particulars of the appellant. It was observed that the address mentioned in the invoice and transport documents differed from the registered principal place of business of the appellant. 1.4. On the basis of the aforesaid discrepancies, the proper officer initiated proceedings under Section 129 of the CGST/UPGST Act, 2017. The goods were detained, and a notice in Form GST MOV-07 was issued to the appellant, calling upon it to explain the discrepancies noticed during the course of inspection and to comply with the applicable statutory requirements. 1.5. Subsequently, the proper officer passed Order No. ZD....
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....y the appellant and the evidence relied upon by the department. 2.4. Whether the impugned orders are sustainable in law when the department has failed to establish, through cogent and reliable evidence, the alleged contravention warranting the imposition of penalty. 3. Grounds of Appeal 3.1. The appellant stated that the impugned Order-in-Appeal passed by the First Appellate Authority is contrary to the facts and circumstances of the case, the material available on record and the applicable provisions of the CGST/UPGST Act, 2017. The appellant contended that the First Appellate Authority failed to properly appreciate the nature of the transaction and the documents accompanying the goods and erroneously upheld the penalty imposed by the proper officer. 3.2. The appellant stated that the goods in question, namely arecanuts weighing 3,990 kg, were being transported under a valid tax invoice issued by M/s Baba Mahakal Enterprises, West Bengal, in favour of the appellant. The appellant contended that the consignment was accompanied by the relevant invoice and transport documents (E way bill no. 881565147250) and that the movement of goods was undertaken in the ordinary cours....
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....ontravention through sufficient and reliable evidence. It was contended that the penalty imposed was disproportionate to the nature of the discrepancies alleged and that the proceedings were liable to be set aside in the absence of adequate material establishing the alleged violation. 3.8. The appellant further stated that the impugned order suffers from errors in the appreciation of facts and application of law and that the findings recorded by the First Appellate Authority are not supported by sufficient material on record. The appellant accordingly prayed that the impugned Order-in-Appeal dated 26.11.2025 and the consequential penalty order dated 19.08.2025 be set aside. 3.9. In view of the foregoing grounds, the appellant prayed that the present second appeal be allowed, the penalty of Rs. 1,07,730/- imposed under Section 129(3) of the CGST/UPGST Act, 2017, read with Section 20 of the IGST Act, 2017, be quashed, and consequential relief be granted in accordance with law. 4. Submissions of the Appellant 4.1. The appellant submitted that the goods in question, namely arecanuts weighing 3,990 kg, were being transported under a valid tax invoice issued by M/s Baba Mahak....
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....that the proper officer had duly examined the documents accompanying the goods and had initiated proceedings in accordance with the applicable provisions of law. 5.3. The respondent further submitted that the First Appellate Authority had considered the facts and circumstances of the case and had rightly rejected the appeal filed by the appellant. It was contended that the penalty imposed by the proper officer was justified in view of the discrepancies noticed during the course of interception and verification of the goods. 5.4. The respondent mentioned that the appellant had not furnished sufficient material to establish that the impugned orders suffered from any legal infirmity. Accordingly, the respondent prayed that the second appeal be dismissed and the impugned Order-in-Appeal, along with the penalty imposed under Section 129(3) of the Act, be upheld. 6. Findings and Discussion 6.1. We have carefully examined the impugned Order-in-Appeal dated 26.11.2025, the order passed by the proper officer in Form GST MOV-07 dated 19.08.2025, the grounds of appeal, the submissions of the appellant and the submissions of the respondent department, along with the material availa....
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....ing the penalty. 6.7. It is a settled principle that the imposition of a penalty must be supported by the relevant statutory provisions and the facts established in the particular case. The proceedings under Section 129 of the Act cannot be sustained merely on the basis of assumptions or unsubstantiated technical allegations. 6.8 We find that the authorities (Proper Officer and Appellate Authority) failed to appreciate the fact that the alleged discrepancy was prurely technical/procedural in nature. There was no mens reaor intent to evade tax on the part of the Appellate. As per settled judicial precedents, penality should not be imposed where there is no less of revenue or intent to defraud the state. As in the case of M/s Hawkins Cookers Limited vs. State of U.P. and Others (Writ Tax No. 739 of 2020), decided on February 12, 2024 the Hon'ble Allahabad High Court. The Hon'ble Court held as below: It is palpably clear that the goods were accompanied with the relevant invoices, bilty documents and the e-way bills. It is to be noted that the invoices and bilty documents also certain the correct address of the destination and only four out of eight of the e-way bil....