The Tribunal held that route deviation is not a statutory offence under the GST Act and that penalty cannot be based on an imagined future act of unloading that never occurred.
The GSTAT Lucknow Bench has set aside a penalty of ₹6,76,694 imposed under Section 129(3) of the CGST/UPGST Act on M/s Shri Ashok Kumar Arora Oil Company, whose tanker carrying refined glycerine was intercepted near a factory gate in Kanpur Dehat — approximately 500 kilometres from the declared route to Ludhiana, Punjab. [Sunny v. Shrawan Kumar Mishra, Assistant Commissioner (Mobile Squad), Kanpur & Ors.]
Members Santosh Kumar Srivastava (Judicial) and Arvind Kumar (Technical) found a fundamental self-contradiction in the Revenue's own order: the DRC-07 demand table recorded the Place of Supply as "Punjab," yet the department alleged diversion to Uttar Pradesh. By entering POS as Punjab, the department's own record confirmed that the movement was to terminate in Punjab — exactly as declared in the invoice and e-way bill.
The Tribunal relied on the Allahabad High Court's ruling in M/s Om Prakash Kuldeep Kumar, which held that unlike the erstwhile VAT Act, the GST Act has no specific provision requiring disclosure of the route of transportation, and that detention and seizure powers can be exercised only when goods are not accompanied by genuine documents — which was not the case here.
The Tribunal noted that the vehicle had not entered the premises, no unloading had occurred, and the entire allegation rested on an imagined future act. Section 129 requires an existing contravention at the time of interception, not a possible one. Relying on Hindustan Steel Ltd. v. State of Odisha, the Tribunal held that penalty will not ordinarily be imposed unless the party acted deliberately in defiance of law.
The amount deposited by the appellant was directed to be refunded in accordance with law.
2026-juristway.com-3029-GSTAT(Lucknow)-GST | GSTAT Lucknow | APL/126/LCK/2026 | 15.10.2026
